The Swiss company’s accounts may be kept not only in Swiss francs, but also in a foreign functional currency, i.e. the most important currency for the company’s activities.
The choice of the foreign currency is the responsibility of the company and cannot be substituted by the authorities. However, the choice must be economically defensible and only one functional currency can be used at a time, although there are cases of dual currency ledger keeping. Based on international accounting principles, the functional currency is the currency of the primary economic environment in which the company operates and the currency in which most cash flows occur. It is the currency that predominantly influences the price of goods and services offered by the taxpayer in the market, costs and expenses, or the currency that predominantly influences the activity of financing, capital issues and investments. The overall analysis of all circumstances is therefore necessary.
However, the financial statements should always be presented with a Swiss franc equivalent, indicating the conversion rate applied. This conversion leads to accounting gains or losses which, however, should not influence the profit, but are only shown as reserves on the balance sheet. This is because these conversion differences are not real, unlike real exchange rate gains and losses due to the fluctuation of the exchange rate between, for example, the date of invoicing in a currency other than the accounting currency and the date of payment or closing of the financial statements.
The reform of the Code of Obligations also provides for the possibility to designate the share capital in a foreign functional currency, under certain conditions.