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Financial Reporting in France: Read this useful guide about the Financial Reporting system and Audit requirements in France.

Financial Reporting in France: Read this useful guide about the Financial Reporting system and Audit requirements in France.

In France, there are specific rules and regulations for financial reporting. These differ from the rules in the United States and other countries. This can make it difficult for businesses to understand what is required of them when preparing financial statements.

The recent financial scandals in France have highlighted the need for greater transparency and accountability in financial reporting. French regulators are now implementing several new rules and regulations, which will affect both public and private companies. These changes will impact how companies prepare their financial statements, as well as how they disclose information to shareholders and the public.

The goal of this article is to provide an overview of French financial reporting requirements, including some of the most important differences from other countries.

The French Financial System

The French financial system is composed of three separate systems: the central bank, the banking sector, and the insurance sector. The French central bank, Banque de France, is the most important player in the French financial system. It is responsible for issuing currency, regulating banks and providing financial stability. The Banque de France also owns a majority stake in the French banking sector.

The French banking sector is dominated by a few large banks, including BNP Paribas, Crédit Agricole and Société Générale. These banks are regulated by the Banque de France and offer a wide range of banking services, including retail banking, corporate banking, and investment banking.

The French insurance sector is also dominated by a few large players, including AXA, Groupama, and La Mutuelle Générale. These insurers are regulated by the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and offer a wide range of insurance products, including life insurance, health insurance, and property insurance.

The French Accounting Standards

The French accounting standards are based on international accounting standards. The French Accounting Standards Board (ASB) is the authority responsible for setting and publishing the standards. The ASB issues accounting standards for corporations, not-for-profit organizations, and public sector entities.

The international accounting standards are set by the International Accounting Standards Board (IASB). The IASB is a private, independent, and not-for-profit organization that develops and promotes International Financial Reporting Standards (IFRSs).

Annual reports in France

In France, annual reports are used to inform company shareholders about the company’s activities and financial situation during the past year. They must be filed with the Commercial Registry within 6 months after the end of the company’s fiscal year. See below some key points to note about French annual reports:

  • They are not required to be audited, although it is common for larger companies to do so.
  • The report must be written in French, although it may also include an English summary.
  • The report must include a balance sheet, income statement, and cash flow statement.
  • The report may also include other information, such as a management report, a description of the company’s activities, and information about its shareholders and directors.

Financial statements in France

The French financial statement system is based on civil law. Financial statements are intended to give a true and fair view of the financial position, performance, and cash flows of a company. The French commercial code requires that companies publish annual financial statements and limited companies must also publish interim statements.

The financial statements are prepared in accordance with French Generally Accepted Accounting Principles (GAAP). The main financial statements are the balance sheet, income statement, and cash flow statement. Supplementary information such as notes to the financial statements and management commentary may also be included.

Management discussion and analysis in France

The French management discussion and analysis (MDA) framework is one of the most sophisticated in the world. The framework is based on two main documents: the management report and the directors’ report. The management report is a document that provides an overview of a company’s strategy, performance, and financial position, while the directors’ report is a document that provides more detailed information about the company’s financial position, risk assessment, and governance.

The MDA framework is mandatory for all companies listed on the French stock market. Companies are required to disclose their MDA documents on their websites and to file them with the French financial regulator, the Autorité des marchés financiers (AMF).

The MDA framework is also voluntary for companies not listed on the French stock market. However, companies that voluntarily adopt the MDA framework are subject to the same disclosure requirements as companies listed on the French stock market.

Corporate governance in France

The French corporate governance system is based on the principle of shareholder democracy. This means that the shareholders are the key decision-makers in companies and that they have the right to be fully informed about company affairs, to approve the company’s accounts, and to elect the board of directors.

The management of the company is entrusted to the board of directors, which is responsible for the day-to-day management of the company.

The French corporate governance system is characterised by a high level of transparency and accountability. The board of directors must publish an annual report on its activities, including a description of its relations with shareholders and an assessment of the company’s financial situation. The board must also disclose any conflict of interest it may have.

Directors must also disclose their shareholdings in the company. Directors and officers are subject to a fiduciary duty to act in the best interests of the company. They may be held liable for any damage they cause to the company.

The French Corporate Governance Code (the “Code”) sets out the principles that companies must comply with when regulating their internal governance arrangements. The Code is not legally binding, but listed companies must disclose whether they comply with its provisions in their annual reports.

The French Financial Markets Authority is responsible for enforcing the Code and can act against companies that do not comply with its provisions, and has a range of enforcement tools at its disposal, including:

  • Issuing warnings or reprimands.
  • Suspending or withdrawing the authorization to market financial products; and
  • Pursuing criminal or administrative sanctions.

How to read and analyse French financial statements.

Reading and analysing French financial statements can be tricky for non-finance professionals. In order to understand the information presented in a financial statement, you need to be fluent in both French and accounting. However, even if you don’t know all the accounting terms, you can still glean important insights from a financial statement by understanding how it’s structured and what each section represents.

A financial statement typically has four sections: income, expenses, assets, and liabilities. The income section shows how much money the company earned over a specific period of time. The expenses section shows how much money the company spent over that same period of time. The assets section shows how much money the company has saved over that period of time. The liabilities section shows how much money the company owes over that period of time.

Important notes about French accounting standards.

There are several key points to be aware of when preparing French financial statements:

  • The balance sheet must always balance: Assets = Liabilities + Equity
  • Income is split into two categories: Revenue and Gains. Revenue is earned through the regular operations of the business, while Gains represent profits or losses from investments, sales of assets, etc.
  • Expenses are split into two categories: Operating Expenses and Non-Operating Expenses. Operating Expenses are incurred in the normal course of business, while Non-Operating Expenses represent costs that are not related to regular operations.
  • Operating Expenses are further divided into two categories: Fixed and Variable. Fixed Expenses are those that do not change with the level of business activity, while Variable Expenses increase or decrease as sales volume changes.
  • Non-Operating Expenses can be either one-time or recurring in nature.

French company law and financial reporting.

French company law is based on the French commercial code. This code contains general principles which are common to all companies and special provisions which apply only to limited companies. The French commercial code is supplemented by several decrees and regulations, including the decree of 2 January 2007 on transparency and financial information disclosure.

The French financial reporting system is based on International Financial Reporting Standards (IFRS). IFRS are issued by the International Accounting Standards Board (IASB), an independent private-sector body. In France, compliance with IFRS is mandatory for all listed companies and large unlisted companies.


This article provided an overview of the French financial reporting system. The French financial reporting system is quite complex, and it can be difficult to keep track of all the different rules and regulations. However, understanding the basics of French financial reporting will help you to better understand the financial statements of French companies.

If you found this article helpful, please go to the rest of the website for more about French Accounting Standards, some of the tax reliefs in France, an overview of Financial Reporting in France, understanding the French tax system, or more accounting and financial topics in International AccountingAuditTaxationAccounting Software, Cloud Accounting and Accounting Automation.

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