What accounting requirements are there in Italy?

The Italian accounting rules are based on a legal framework, the Italian Civil Code. The accounting requirements for joint stock companies are the same, regardless of the size of the company. Bookkeeping is compulsory for every natural and legal person that owns a business in Italy. Double-entry method and generally accepted accounting principles are followed.

Accounting records have to be kept in EURO and in Italian. The main principles of proper bookkeeping include: completeness, materiality, accuracy, continuity, clarity, and valuation based on corresponding payments, economic focus, prudence, realization, individual valuation and measurement at the balance sheet date.

Companies are free to adopt any bookkeeping system they find desirable, and are also free to use all types of processing techniques, as long as they provide all the information necessary to prepare statutory financial statements.

Corporations are required by law to keep certain accounting books:

• General Journal (Libro Giornale – as required by the Italian Civil Code)
• Inventory book (Libro Inventari - as required by the Italian Civil Code)
• Other Ledgers (also for by the VAT and the direct tax law : e.g. Libro Mastro and Registri IVA)

More information on the general situation of the Italy’s accounting standards can be found in this publication (page 5).

From 1 January 2005 onwards, the European Union (EU) Parliament required all companies listed in the EU to adopt the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) for the preparation of their consolidated financial statements.

For more details regarding IAS/IFRSGAAP in Italy, please refer to the financial reporting framework in Italy .

Useful Links

• Financial reporting framework in Italy
• IAS/IFRS Standards and Interpretations