Year-end closing of a French subsidiary
A French subsidiary closes its year twice: once fast for the group, once fully for French law. The two closings use the same books but not the same rules, and they rarely have the same deadline.
Here is how a closing usually runs for a company whose financial year ends on 31 December.
Before the year end
Agree the group reporting calendar and the format expected by head office.
Plan the stock count if the company holds inventory.
List the intercompany invoices still to be issued or received.
Identify the unusual items of the year: disputes, large contracts, asset purchases.
The closing entries
Cut-off. Revenue and expenses are recorded in the period they relate to: unbilled revenue, invoices not yet received, prepaid expenses.
Receivables. Doubtful customer balances are reviewed and provisioned when needed.
Payroll. Accrued paid leave and bonuses are recorded. French paid leave rules often generate a significant accrual.
Fixed assets. Depreciation is computed and new assets are recorded.
Provisions. Risks and disputes known at the year end are assessed.
Intercompany. Balances with group companies are reconciled.
Two sets of numbers
Group reporting usually follows the group's framework, often IFRS or US GAAP, while the statutory accounts follow French rules. Leases, revenue recognition and some provisions are treated differently. We keep a reconciliation between the two so your group finance team can follow. See French statutory accounts and group reporting.
After the closing
Corporate income tax return. Filed in early May for a December year end, together with the tax computation.
Approval of the accounts. The shareholders approve the accounts within six months of the year end.
Filing. The approved accounts are filed with the commercial court registry within one month, or two months when filed online. Smaller companies can ask for their accounts to be kept confidential.
Statutory audit. A French subsidiary needs a statutory auditor only above certain size thresholds, or when the group requires it.
A typical timeline
January: hard close and group reporting package.
February to March: French statutory accounts and tax computation.
April to May: corporate tax return and payment of the tax balance.
By 30 June: approval of the accounts, then filing.
What this page does not cover
Deadlines and obligations depend on the size of the company, its legal form and its group. This page is a general guide, not advice for your situation.
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A closing your group can rely on
We agree the calendar with your finance team, deliver the group package on time and produce the French statutory accounts and tax return. You get one point of contact, in English.
4 avenue du 11 Novembre
92400 Courbevoie
contact@montaben-expertise-conseil.com