Accounting in Morocco: A Complete Guide

In brief: Accounting in Morocco is governed by the CGNC (Code Général de Normalisation Comptable) and law 09-88. Every company must record financial transactions using double-entry bookkeeping, follow the PCGE chart of accounts, and produce five mandatory financial statements annually.

Accounting in Morocco is a regulated discipline that consists of chronologically recording the financial flow movements of a company. This discipline serves as the basis for producing a company’s financial statements.

Bookkeeping in Morocco can be performed either directly by the company or outsourced to an accounting firm.

It is an essential discipline for managing and monitoring a company’s finances, governed by standards and regulations specific to the Moroccan economic ecosystem. This practice includes recording, analyzing, and presenting financial transactions, thereby enabling companies to maintain financial transparency and comply with the country’s legal and tax obligations.

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Definition - What Is Accounting?

The General Chart of Accounts (CGNC) in Morocco defines accounting as a discipline that consists of:

First, collecting and aggregating information relating to the company’s financial operations;
Second, presenting this information in the form of accounting entries;
Third, summarizing this information in the form of financial statements.

An accounting entry corresponds to a recording of a transaction according to a standard. These standards are as follows:

First, an accounting entry is made using double-entry bookkeeping. Each entry must include a debit and a credit;
Second, an entry must follow the account numbers defined by the accounting standard;
Third, an entry is made in monetary units.

What Regulations Govern Accounting in Morocco?

Accounting in Morocco must comply with the standards of the CGNC, as enforced by the DGI and supervised by the OEC.

The CGNC defines the general principles according to which:

First, accounting entries must be recorded;
Second, financial statements must be prepared;
Third, the accounting principles that the company must follow.

What Are the Accounting Principles Set Out by the CGNC?

The CGNC aims to satisfy two main objectives:

First, to serve as a basis for the information and management of the company;
Second, to provide a true and fair view of the company to users of the accounts, whether private or public.

The CGNC sets out 7 main accounting principles, which are as follows:

The Going Concern Principle

Under the going concern principle, the company must prepare its accounts on the assumption that it will continue its operations. In the absence of going concern, the company must present its accounts at liquidation values.

The Consistency of Methods Principle

The company must apply the same rules of valuation and presentation from one fiscal year to the next when preparing its accounts.

The Historical Cost Principle

The initial value of an item recorded in accounting in Morocco remains unchanged regardless of any subsequent changes in purchasing power.

The Accrual Principle (Period-End Cut-Off)

Accounting regulations divide the life of the company into fiscal years. The company must record expenses and revenue in the fiscal year to which they relate.

The Prudence Principle

Under the prudence principle, when a company identifies an uncertainty likely to result in:

First, an increase in expenses
or, second, a decrease in the period’s revenue

It must take them into account in accounting in Morocco, particularly in calculating the result for that fiscal year.

The Clarity Principle in Accounting in Morocco

Under the clarity principle:

First, the company must record information:

under the appropriate heading,
with the correct designation
and without offsetting between items;
Second, it must value assets and liabilities separately;
Third, it must prepare financial statements without offsetting between different line items.

Materiality in Accounting

The company must disclose in its financial statements all items whose significance could affect valuations and decisions.

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Who Can Maintain Accounting Records in Morocco?

The company can maintain its accounting internally. It may also entrust it to a chartered accountant or a licensed accountant.

Key options for maintaining accounting records include:

In-house accounting managed by a salaried accountant
Outsourcing to a chartered accountant registered with the OEC
Licensed accountant (expert-comptable agréé) for smaller structures

What Is the Role of Accounting in Morocco?

By preparing the accounts, accounting serves as a management tool. Financial statements provide insight into the company’s financial position.

Accounting in Morocco plays an informational role for stakeholders (third parties). Third parties (banks, shareholders, employees, etc.) are interested in how the business is progressing and its financial health. Accounting meets this need.

Accounting in Morocco is the financial information tool par excellence.

The objective of an accounting system is to:

First, enable the recording of transactions according to the rules in force;
Second, provide principles for summarizing these transactions into aggregated forms;
Third, create standardized statements that users can read and analyze to draw conclusions.

The Accounting System

The accounting books that a company must prepare as a legal requirement are as follows:

First, an accounting procedures manual. The manual serves to describe

the accounting organization
the accounting methods
the general accounting principles
Second, the company must maintain a journal. This book records daily transactions in chronological order;
Third, the general ledger. This book groups accounting entries by account;
Fourth, the trial balance lists the different account balances
Finally, the various financial statements explained below

What Financial Statements Does Accounting in Morocco Produce?

Accounting in Morocco produces:

First, the balance sheet, which provides information on the company’s net worth
Second, the income statement, which provides information on operating results
Third, the cash flow statement, which provides information about cash
The notes to the financial statements provide general information, particularly about accounting methods and principles

What Is Accounting and What Is Its Role?

Accounting, considered the universal language of the business sector, plays a crucial role in the management and development of companies, regardless of their size.

It ensures the viability and financial health of companies by enabling rigorous monitoring of economic activities through the recording, analysis, and classification of financial data. This complex process includes managing numerous tasks such as processing financial data, assessing the financial situation, and classifying incoming and outgoing financial flows.

Accounting is not only a financial information tool, offering an overview of a company’s financial position through its annual accounts, but also a decision-support instrument.

The annual accounts, comprising the balance sheet, the income statement, and the notes, provide essential data for evaluating economic performance and making informed decisions about the company’s future.

In addition to its information and management functions, accounting also plays a preventive role by enabling companies to anticipate financial difficulties and ensure their long-term viability. Accounting in Morocco is governed by the Commercial Code and loi 09-88, which require the maintenance of accurate and regular accounts that faithfully reflect the company’s assets, financial position, and results. This legal framework aims to guarantee the transparency and reliability of financial information, which are fundamental elements for investors, creditors, and other stakeholders.

Accounting encompasses various specialized branches, each addressing specific company needs. Financial accounting, or general accounting, records financial transactions to summarize data in the main financial documents. Management accounting, or cost accounting, focuses on internal analysis for business decision-making. Other branches include subsidiary accounting, which manages the company’s specific accounts, and cash accounting, which tracks receipts and expenditures during the fiscal year.

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Regulatory Framework for Accounting in Morocco

The regulatory framework for accounting in Morocco is structured by a series of legislative and regulatory texts aimed at establishing the accounting standards and principles that all companies operating in Morocco must follow. Among the main elements of this framework are accounting law 09-88, the General Chart of Accounts (CGNC), as well as the General Tax Code and its circulars.

Accounting law 09-88 and the CGNC form the basis of the Moroccan accounting system, imposing a set of rules and standards for the presentation and maintenance of accounts. These documents aim to ensure a true and transparent view of companies’ financial positions, thereby facilitating comparison and dialogue with international stakeholders. However, the Moroccan accounting system, while adapting to local specificities, has certain divergences from international standards such as IFRS, particularly regarding asset valuation, the treatment of leasing contracts, and the valuation of provisions. These differences highlight Morocco’s unique approach, which focuses more on the legal form of transactions rather than their economic substance.

Furthermore, Moroccan accounting regulations have a significant impact on corporate taxation, particularly with respect to Corporate Tax (IS). Companies must maintain accounts that comply with Moroccan standards to enable the precise determination of taxable income, which serves as the basis for calculating Corporate Tax (IS). This system ensures that all deductible expenses and taxable revenues are correctly recorded, thereby enabling fair and transparent taxation of companies.

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General Chart of Accounts (PCG) and Sector-Specific Plans

The General Chart of Accounts (PCG) is the cornerstone of accounting in Morocco for all companies operating in the Kingdom. This legal document is mandatory and establishes a framework for the recording, classification, and presentation of financial transactions. It is structured around accounting principles adapted to the specificities of the Moroccan context while being aligned with certain international accounting standards. The Moroccan PCG is divided into main classes, covering areas ranging from permanent financing to revenue, through fixed and current assets, current liabilities, and cash.

In addition to the PCG, Morocco has sector-specific charts of accounts for specific industries such as insurance, associations, and real estate developers. These plans are based on the common foundation of PCG accounting principles but are detailed to meet the unique needs of each sector.

The codification and classification of accounts in the Moroccan Chart of Accounts facilitate rapid account identification and the generation of financial statements necessary for company management. This accounting system in Morocco enables not only the accurate preparation of financial statements but also the analysis of past performance and strategic decision-making for the future.

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Challenges in Implementing Accounting in Morocco

The implementation of the Moroccan Chart of Accounts (PCM) and sector-specific charts of accounts in Morocco is essential for standardizing and harmonizing corporate accounting, providing a clear framework for the recording, classification, and presentation of financial transactions. However, this implementation is not without challenges. Moroccan companies face several obstacles, including the complexity of correctly understanding and applying the accounting standards and principles established by the PCM and the adapted sector-specific plans. Moreover, the effective use of accounting IT tools represents another major challenge for companies, particularly for small and medium-sized enterprises that may lack specialized accounting resources.

Despite these challenges, the advantages of well-maintained accounting are numerous. Effective and transparent accounting management not only enables the tracking of transactions and accurate assessment of company performance but also facilitates business relationships by providing reliable financial information to stakeholders such as banks, investors, and tax authorities. Furthermore, compliance with PCM principles and rules helps companies meet their legal and regulatory obligations in accounting, thereby avoiding penalties and disputes related to non-compliance.

The use of the PCM and sector-specific charts of accounts therefore strengthens trust in business relationships and contributes to good governance and the sustainability of companies in Morocco.

For more information and to deepen your understanding of accounting in Morocco, please consult the following sources:

Need help setting up or managing your accounting in Morocco? Contact Upsilon Consulting to speak with a chartered accountant today.

Frequently Asked Questions

What is the accounting framework applicable in Morocco?

Morocco uses the CGNC (Code Général de Normalisation Comptable) as its primary accounting framework. All businesses operating in Morocco must comply with the Moroccan General Chart of Accounts (Plan Comptable Général des Entreprises - PCGE), which defines the rules for recording and presenting financial transactions.

Is it mandatory to hire an accountant in Morocco?

While there is no legal obligation for all businesses to hire a chartered accountant, companies above certain thresholds must have their accounts audited. In practice, engaging a qualified accountant is strongly recommended to ensure compliance with Moroccan accounting standards and tax regulations.

What are the main financial statements required in Morocco?

Moroccan companies are required to prepare five main financial statements as part of their annual accounts: the Balance Sheet (Bilan), the Income Statement (Compte de Produits et Charges - CPC), the Management Account (État des Soldes de Gestion - ESG), the Cash Flow Statement (Tableau de Financement), and the Notes to the Financial Statements (État des Informations Complémentaires - ETIC). These documents must be prepared in accordance with the PCGE and filed with the relevant tax authorities within the prescribed deadlines. Together, they provide a comprehensive view of the company’s financial position, performance, and cash flows.

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