In brief: Law 9-88 and the CGNC require every merchant in Morocco to prepare five financial statements at the close of each fiscal year: the balance sheet, the income statement (CPC), the statement of management balances (ESG), the funding table (TF) and the supplementary information statement (ETIC). These documents must be produced within 3 months after the year-end and filed with the commercial court registry 30 days after the general meeting of approval.
Legal Basis for Financial Statements
Financial statements represent the financial translation of a company’s activity over a fiscal year. In Morocco, their preparation is governed by two fundamental texts:
- Law 9-88 on the accounting obligations of merchants, particularly Art. 18, which lists the five mandatory statements and sets out the presentation requirements.
- The CGNC (Code Général de Normalisation Comptable), Title V, which details the content, format and valuation rules applicable to each statement.
The financial statements form an inseparable whole. They must provide a true and fair view of the assets, financial position and results of the company. This true and fair view obligation is the guiding principle governing all Moroccan accounting production, consistent with the fundamental accounting principles of the CGNC.
Standard Model vs Simplified Model
The CGNC provides for two presentation models:
| Criterion | Standard model | Simplified model |
|---|---|---|
| Revenue threshold | > 10,000,000 MAD | ≤ 10,000,000 MAD |
| Mandatory statements | 5 (balance sheet, CPC, ESG, TF, ETIC) | 3 (balance sheet, CPC, simplified ETIC) |
| Level of detail | Complete | Condensed |
| Target audience | SA, large SARL, listed companies | SMEs, micro-enterprises |
Companies falling under the simplified model may voluntarily opt for the standard model if they wish to provide more detailed financial information, particularly for banking partners or investors.
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The Balance Sheet: A Snapshot of the Company’s Assets
The balance sheet is the financial statement that presents the company’s asset position at the closing date. It consists of two symmetrical parts:
Assets list what the company owns:
- Non-current assets: start-up costs, intangible assets, tangible assets, financial assets — presented at gross value, accumulated depreciation/provisions and net value.
- Current assets: inventories, receivables, marketable securities, cash and cash equivalents.
Liabilities list the financing resources:
- Permanent financing: shareholders’ equity (share capital, reserves, net income), long-term debt, long-term provisions for risks and charges.
- Current liabilities: trade payables, social security bodies, government, shareholder accounts, short-term borrowings.
The balance sheet must be prepared according to the chart of accounts of the Plan Comptable Général des Entreprises (PCGE), which codifies each heading using a class system (1 to 5).
Fundamental Equilibrium
The accounting equation Assets = Liabilities must always hold true. Any discrepancy reveals a recording error that must be corrected before finalising the accounts.
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The CPC: Measuring Performance
The Compte de Produits et Charges (Income Statement) records all income and expenses for the fiscal year, classified into three levels:
- Operating: revenue, changes in inventories, capitalised production on one side; cost of goods consumed, personnel expenses, operating depreciation charges on the other. The balance gives the operating result.
- Financial: income from investments, interest received versus interest paid, foreign exchange losses. The balance gives the financial result.
- Non-recurring: gains on disposal of fixed assets, equalisation subsidies versus net book values of disposed assets, penalties, fines. The balance gives the non-recurring result.
The pre-tax result is the sum of the three results. After deducting corporate income tax, the net income for the year is obtained, which is carried to the liabilities side of the balance sheet.
The CPC adopts a list-based presentation (rather than a two-column format) in the CGNC standard model, which facilitates top-down reading of how the result is formed.
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The ESG: Analysing Value Creation
The État des Soldes de Gestion (Statement of Management Balances) is an analytical statement that breaks down the result into intermediate management balances and presents the self-financing capacity (CAF). It is mandatory only under the standard model.
Intermediate Management Balances
| Balance | Simplified calculation |
|---|---|
| Gross margin on resold goods | Sales of goods – Cost of goods sold |
| Production for the year | Sales of produced goods/services ± Inventory changes ± Capitalised production |
| Value added | Gross margin + Production – External consumption |
| Gross operating surplus (EBE) | Value added + Operating subsidies – Taxes and duties – Personnel expenses |
| Operating result | EBE + Other operating income – Other charges – Depreciation charges + Reversals |
| Current result | Operating result + Financial result |
| Net result | Current result + Non-recurring result – Corporate tax |
Self-Financing Capacity
The CAF measures the internal resources generated by the company’s activity. It is calculated using either the additive method (net income + depreciation charges – reversals ± gains/losses on disposals) or the subtractive method (starting from the EBE). The CAF is a key indicator for banks and forms the basis for calculating self-financing (CAF – dividends distributed).
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The Funding Table: Analysis of Balance Sheet Changes
The funding table (TF) explains the change in functional working capital during the fiscal year. Mandatory only under the standard model, it consists of two parts:
Summary of balance sheet aggregates:
- Functional working capital (FRF) = Permanent financing – Non-current assets
- Overall financing requirement (BFG) = Current assets (excl. cash) – Current liabilities (excl. cash)
- Net cash position (TN) = FRF – BFG
Table of uses and resources:
- Stable resources: CAF, disposals of fixed assets, capital increases, new borrowings
- Stable uses: acquisitions of fixed assets, loan repayments, dividend distributions
The change in net cash position must correspond exactly to the difference between stable resources and uses, adjusted for changes in BFG. This cross-check is a powerful tool for verifying the consistency of the financial statements.
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The ETIC: Essential Supplementary Information
The État des Informations Complémentaires (Supplementary Information Statement) complements and comments on the other four statements. It comprises three sections:
- Accounting principles and methods: valuation methods adopted (FIFO, weighted average cost for inventories), depreciation methods, provision calculation methods, any changes in methods and their impact.
- Additional information on the balance sheet and CPC: detail of fixed assets and depreciation (movement schedule), statement of provisions, revenue breakdown by activity and geographic area, off-balance sheet commitments (guarantees, leases, pledges).
- Other information: average headcount, management remuneration, foreign currency transactions, post-closing events.
The ETIC is often overlooked by SMEs, yet it is an essential element of a true and fair view. Without the ETIC, the financial statements are considered incomplete by the tax authorities and auditors.
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Filing Deadlines and Formalities
Compliance with deadlines is a legal obligation subject to penalties:
| Step | Deadline |
|---|---|
| Preparation of financial statements | 3 months after the closing date |
| Annual general meeting for approval of accounts | 6 months after closing (SA/SARL) |
| Filing with the commercial court registry | 30 days after the AGM |
| Retention of accounting documents | 10 years minimum |
The year-end inventory is an essential prerequisite for preparing the financial statements: it enables a comprehensive review and valuation of all assets and liabilities before they are recorded in the accounts.
To ensure compliance of your financial statements and their optimal presentation, engage a qualified chartered accountant who masters the requirements of the CGNC and Law 9-88.
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Frequently Asked Questions
Which financial statements are mandatory for an SME in Morocco?
Companies with revenue not exceeding 10 million dirhams may adopt the simplified model, which requires only three statements: the balance sheet, the CPC and a simplified ETIC. The ESG and the funding table are then not mandatory, but remain recommended for in-depth financial analysis.
What is the difference between the CGNC funding table and the IAS 7 cash flow statement?
The CGNC funding table is a balance sheet-based statement that analyses changes in working capital, BFG and net cash position from balance sheet aggregates. The IAS 7 cash flow statement, used under IFRS, classifies flows into three categories (operating, investing, financing) based on actual receipts and payments. The IFRS approach is cash-oriented, while the CGNC approach is asset-oriented.
What are the penalties for failing to file financial statements with the registry?
Failure to file financial statements within the prescribed deadlines exposes the company to fines of 10,000 to 50,000 MAD under Art. 384 of the Code de Commerce. Furthermore, the tax authorities may reject the accounts under Art. 213 of the CGI and proceed with a reconstruction of revenue.
Legal references:
- Loi 9-88 relative aux obligations comptables des commerçants — Art. 18 (financial statements)
- CGNC, Titre V — Content and preparation of financial statements
- Code de Commerce — Art. 384 (penalties)
- CGI 2026 — Art. 213 (rejection of accounts)
READ ALSO:
- CGNC in Morocco: Fundamental Accounting Principles
- General Chart of Accounts for Enterprises (PCGE)
- Year-End Inventory in Morocco
- The 7 Accounting Principles in Morocco
Need assistance with preparing your financial statements? Contact Upsilon Consulting, a chartered accountancy firm in Casablanca, for compliant and timely production.
