• Lithuania is included in the IFAD GAAP Convergence Studies
• National Professional Organisation Website: Lithuanian Chamber of Auditors
• World Bank ROSC Accounting and Auditing Report

Update for December 2008

Adoption of IFRSs in Europe Effective in 2005

In June 2002, the European Union adopted an IAS Regulation requiring European companies listed in an EU securities market, including banks and insurance companies, to prepare their consolidated financial statements in accordance with IFRSs starting with financial statements for financial year 2005 onwards. EU countries have the option to:

• Require or permit IFRSs for unlisted companies.
• Require or permit IFRSs in parent company (unconsolidated) financial statements.
• Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007.
• Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007.

The European IAS regulation applies not only to the 27 EU Member States but also to the three members of the European Economic Area (EEA) – Iceland, Liechtenstein, and Norway.

Lithuania is an EU Member State. Consequently, Lithuanian companies companies listed in an EU securities market must follow IFRSs starting in 2005. In January 2005, the European Commission published the results of a survey of the 25 EU member states and the 3 EEA member states on their plans regarding the four options above. For information on each country's plans, click to download:

• Table on Use of IFRS Options in 27 Member and 3 EEA States (PDF 52k)

The European Commission has adopted the following wording for use in the notes to the accounts and in the audit reports of companies subject to EU Regulation 1606/2002/EC (the 'IAS regulation'):

• "in accordance with International Financial Reporting Standards as adopted by the EU" or
• "in accordance with IFRSs as adopted by the EU".

Companies may also state, in a footnote, compliance with IFRSs as adopted by the IASB, if that is the case.

Unlisted companies may use IFRSs

The Law on Financial Statements of Entities (Republic of Lithuania) was amended on 26 June 2008 to permit unlisted companies to choose to prepare their financial statements using IFRSs:

Article 15. General Requirements for the Drawing Up of Financial Reports

(...) 4. Financial reports shall be drawn up in compliance with this Law, the Business Accounting Standards* or the International Accounting Standards (hereinafter referred to as 'accounting standards') and other legal acts.

5. The entities whose securities are admitted on a regulated market shall draw up financial reports according to international accounting standards, and other entities may select whether to draw up the financial reports according to the Business Accounting Standards or the International Accounting Standards, and such a choice may not be altered earlier than after the lapse of 5 years (with the exception of the case when an entity joins a group of entities). The non-limited civil liability legal persons indicated in paragraphs 2 and 3 of Article 2 of this Law shall draw up financial reports according to the Business Accounting Standards.

6. The notes on the accounts must specify the accounting standards according to which financial reports have been drawn up.

*Business Accounting Standards are Lithuanian national standards.