Accounting

The Law of 7 August 2023 on non-profit associations and foundations (Loi du 7 août 2023 sur les associations sans but lucratif et les fondations), hereafter 'the Law of 7 August 2023' or 'the new law', provides for the introduction of a new accounting regime for non-profit associations (hereafter 'ASBLs' or 'associations') and foundations.

Since the vast majority of associations are small, complying with the new regime may seem quite challenging for their directors and treasurers.

The purpose of this 'Guide to Accounting for Small Associations' is therefore to facilitate the tasks incumbent on directors and treasurers of small associations, by explaining, in simple terms, the steps to follow to ensure that their associations comply with the new accounting regime that applies to them.

The first question that directors and treasurers of small associations should ask themselves is when they should start implementing the new accounting regime provided for in the Law of 7 August 2023.

To determine when they should start implementing this new regime, they should first establish whether their association was formed before or after the date on which the new law entered into force, i.e. 23 September 2023. The decision tree below presents an overview of the questions that associations' directors and treasurers should answer, in order to determine exactly when they should start implementing the new accounting regime.

A distinction should therefore be made between those associations that were formed before the date on which the new law entered into force and those that were formed after it took effect. Both of these cases are discussed below, starting with associations formed after the new law entered into force (see section 2.1.), followed by associations formed before that date (see section 2.2.).

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Article 77(1) of the new law stipulates that:

The articles of association of associations and foundations formed before this law's entry into force shall be made compliant with the provisions of this law within twenty-four months of this law's entry into force (…).
Over the intervening period, such associations and foundations shall continue to be subject to the previously applicable legal provisions (…).

In light of the foregoing, associations formed before 23 September 2023 will continue to be subject to the former regime – as provided for in the old Law of 21 April 1928 and their existing articles of association – for a period of no more than 24 months, i.e. until 23 September 2025, unless they bring their articles of association into compliance with the new law before that deadline.

For associations formed after the new law's entry into force, the new accounting regime applies immediately, i.e. as of their first financial year.

Example 1 – An association whose financial year coincides with the calendar year updated its articles of association on 15 December 2023.

Since the association brought its articles of association into compliance before the 23 September 2025 deadline, the new accounting regime would apply as of the financial year following that in which the articles of association were made compliant, that is to say, as of the financial year commencing on 1 January 2024, for which the financial statements would need to be approved by no later than 30 June 2025, and filed with the Trade and Companies Register (RCS) by no later than 31 July 2025.

Example 2 – An association whose financial year coincides with the calendar year failed to update its articles of association by the 23 September 2025 deadline.

Since the association failed to bring its articles of association into compliance before the 23 September 2025 deadline, the new accounting regime would apply as of the first financial year following that in which the deadline fell, that is to say, as of the financial year commencing on 1 January 2026, for which the financial statements would need to be approved by no later than 30 June 2027, and filed with the Trade and Companies Register (RCS) by no later than 31 July 2027.

Example 3 – A sports club that was set up as an association, with its financial year commencing on 1 October and ending on 30 September of the following year, failed to bring its articles of association into compliance within 24 months of the new law's entry into force.

Since the association failed to bring its articles of association into compliance before the 23 September 2025 deadline, the new accounting regime would apply as of the first financial year following that in which the deadline fell, that is to say, as of the financial year commencing on 1 October 2025 and ending on 30 September 2026, for which the financial statements would need to be approved by no later than 31 March 2027, and filed with the Trade and Companies Register (RCS) by no later than 30 April 2027.

Example 4 – A dance club that was set up as an association, with its financial year commencing on 1 September and ending on 31 August of the following year, failed to bring its articles of association into compliance within 24 months of the new law's entry into force.

Since the association failed to bring its articles of association into compliance before the 23 September 2025 deadline, the new accounting regime would apply as of the first financial year following that in which the deadline fell, that is to say, as of the financial year commencing on 1 September 2026 and ending on 31 August 2027, for which the financial statements would need to be approved by no later than 29 February 2028, and filed with the Trade and Companies Register (RCS) by no later than 31 March 2028.