Auditing conventional foundations
Foundation law in Switzerland is liberal. In this respect, the law does not precisely specify which accounting principles are to be applied by foundations, but refers in summary to the guidelines in the Swiss Code of Obligations and/or stock corporation law – taking into account the characteristics of foundations. Auditing practice is often based on methods which have been applied in an unchanged manner for years. Both teaching and associations have therefore demanded modern, foundation-specific accounting forms for voluntary application: Since 2015, accounting law irrespective of legal form also applies for foundations. To what extent the minimum structuring requirements can be reconciled with the characteristics of a foundation remains to be seen in practice. In this context, there is also discussion of whether fund assets are to be added to loan capital or equity, or whether a separate category should be maintained between both items.
Good to know
An advanced approach in accounting increases transparency and is relatively easy to implement in many cases. This can already prepare a foundation for a possible later conversion to the Swiss GAAP FER. We prefer advanced approaches which in particular provide for fund accounting.