Financial Reporting for Lithuanian Companies

The Lithuanian Financial Reporting Framework

The Law on Financial Accounting and Reporting (FAĮ)

The Financial Accounting Law (Finansinės apskaitos įstatymas, FAĮ), substantially revised with effect from 1 May 2022, governs the organisation and maintenance of accounting. Company financial reporting is also governed by the Law on Reporting by Undertakings and Groups of Undertakings (Įmonių ir įmonių grupių atskaitomybės įstatymas), while approval and filing obligations are governed by the legislation applicable to the company’s legal form. The Financial Accounting Law governs accounting organisation and the applicable reporting frameworks. Company size categories and financial statement components are governed by the Law on Reporting by Undertakings and Groups of Undertakings. Approval and filing requirements also depend on the company’s legal form.

Lithuanian Business Accounting Standards (VAS)

The Lithuanian Business Accounting Standards (verslo apskaitos standartai — VAS) are the primary accounting standards applicable to most Lithuanian companies. The applicable Lithuanian accounting standards and their methodological guidance are published through the official resources of the Ministry of Finance and AVNT. Companies must use the versions applicable to the reporting period. Relevant standards include VAS 1 on financial reporting, VAS 10 on revenue, VAS 20 on leases, VAS 19 on provisions, contingent liabilities and assets and subsequent events, VAS 18 on financial assets and liabilities, and VAS 16 on consolidated financial statements and investments in subsidiaries. VAS are conceptually similar to IFRS but are simpler and more rules-based — making them accessible for companies without dedicated finance teams.

IFRS applicability in Lithuania

IFRS as adopted by the EU are mandatory for entities specified in Article 11 of the Financial Accounting Law, including companies whose securities are traded on a regulated market and certain regulated financial and crypto-asset entities. IFRS are permitted (but not mandatory) for other Lithuanian companies that wish to apply them — particularly where the parent company uses IFRS and consolidation consistency is desired. In practice, most foreign-owned Lithuanian UABs apply VAS for their statutory financial statements and provide IFRS-adjusted management accounts to their foreign parent for consolidation purposes.

Audit requirements

Under Article 3 of the Law on the Audit of Financial Statements and Other Assurance Services, a statutory audit is generally required where at least two indicators exceed these thresholds: balance sheet assets EUR 2,500,000; net sales revenue EUR 4,500,000; average annual number of employees 50. Other statutory audit triggers also apply. Companies below the size thresholds may still be subject to a statutory audit because of their legal form, public ownership, regulated activities, consolidated reporting obligations or qualifying public funding or support exceeding EUR 500,000. An audit may also be required contractually or commissioned voluntarily. The audit must be performed by a licensed auditor or audit firm registered with the Lithuanian Chamber of Auditors (Auditorių rūmai).

Company Size Categories and Reporting Requirements

The Law on Reporting by Undertakings and Groups of Undertakings defines four company size categories that determine the required financial statements and available reporting exemptions. A company’s size category is determined by its performance over the prior two consecutive financial years.

Components of the Annual Financial Statements

Balance sheet (balanso ataskaita)

The balance sheet presents the company’s financial position at the reporting date — its assets, liabilities, and equity. Under VAS, assets are presented in order of increasing liquidity (non-current assets first) and liabilities in order of maturity (long-term first). The balance sheet must balance — total assets must equal total liabilities plus equity. For micro and small enterprises, an abbreviated format is permitted that combines certain line items. The balance sheet date for most Lithuanian companies is 31 December (end of the calendar year), though companies may apply to VMI for a different financial year-end.

Income statement (pelno (nuostolių) ataskaita)

The income statement presents the company’s revenues, expenses, and profit or loss for the reporting period. Lithuanian VAS permits two formats for the income statement: the functional format (classifying expenses by function — cost of sales, selling expenses, administrative expenses) and the nature format (classifying expenses by nature — materials, labour, depreciation). Most Lithuanian companies use the nature format. The income statement must reconcile to the CIT return — the taxable profit for CIT purposes is derived by adjusting accounting profit for non-deductible expenses, exempt income, and tax loss carry-forwards.

Cash flow statement (pinigų srautų ataskaita)

The cash flow statement is required only for medium and large enterprises. It presents cash inflows and outflows during the period, classified into operating, investing, and financing activities. Lithuanian VAS allows both the direct method (presenting actual cash receipts and payments for operating activities) and the indirect method (reconciling profit from the income statement to cash from operations). The indirect method is more common in practice. The cash flow statement is one of the most valuable financial reporting documents for foreign parent companies assessing the Lithuanian subsidiary’s liquidity and funding needs.

Statement of changes in equity (nuosavo kapitalo pokyčių ataskaita)

The statement of changes in equity is required for medium and large enterprises. It presents all movements in equity during the period — share capital changes, retained earnings changes, dividend distributions, and other comprehensive income items. For foreign-owned companies, the equity movement statement is particularly important for confirming that dividends paid to the parent have been correctly declared and that retained earnings are accurately reported.

Notes to the financial statements (aiškinamasis raštas)

The notes provide qualitative and quantitative disclosures that supplement the numerical financial statements. Required note disclosures under VAS vary by company size — micro enterprises can provide minimal notes (accounting policies, any departures from standard policies, and certain required disclosures); small enterprises provide expanded notes; medium and large enterprises provide comprehensive notes. For foreign-owned companies, the notes are the place where related party transactions — including intercompany loans, management fees, and transactions with shareholders — must be disclosed. VMI and potential auditors review the notes for related party transaction consistency with transfer pricing documentation.

Filing Obligations and Deadlines

Centre of Registers filing — applicable statutory deadlines

For UAB and AB companies with financial years ending on or after 1 July 2026, annual financial statements must be approved and filed within five months after the financial year-end under the Law on Companies. For financial years ending before that date, approval was generally required within four months and filing within 30 days after approval. The financial statements must be approved by the shareholders before they can be filed — the annual general meeting (or written shareholder resolution) approving the accounts must precede the filing. The Centre of Registers publishes filed financial statements in its public database — they are accessible to any person searching the company’s register entry.

What happens if the deadline is missed

Failure to submit the required financial reporting documents on time may result in an administrative fine of EUR 600–1,400 for the responsible manager or other legally designated person under Article 223(2) of the Code of Administrative Offences. Continued non-filing may lead to further registry measures. Missing statements can also affect due diligence, credit assessments and regulatory applications; these consequences depend on the circumstances.

VMI connection — CIT return filing

The annual corporate income tax return must generally be filed with VMI by the 15th day of the sixth month of the following tax period. For a calendar-year tax period, this is 15 June of the following year. However, the CIT return is derived from the annual financial statements — the taxable profit is calculated starting from the accounting profit in the income statement. The financial statements must therefore be finalised before the CIT return can be prepared. We coordinate the financial statement and CIT return preparation on the same timetable to ensure consistency.

Non-December financial year-ends

A company’s financial year is established under the applicable company law and its constitutional documents. A different corporate income tax period requires separate consideration under VMI procedures. Financial statement approval and filing deadlines are calculated from the financial year-end under the rules applicable to the company’s legal form and reporting period. We advise on whether a non-December year-end is operationally beneficial and manage the VMI application process.

Management Reporting for Foreign Parent Companies

Statutory VAS financial statements meet the Lithuanian legal requirement — but they are not always sufficient for the foreign parent’s management and consolidation purposes. Most international groups require their Lithuanian subsidiaries to provide management accounts in a different format, on a different timetable (monthly or quarterly), and often under different accounting standards (IFRS or the parent’s local GAAP).

The gap between VAS and parent requirements

VAS and IFRS differ in several areas that affect the numbers reported for the same period: lease accounting (IFRS 16 requires right-of-use assets and lease liabilities on the balance sheet; VAS treats operating leases as off-balance sheet); revenue recognition (IFRS 15 five-step model vs. VAS revenue recognition principles); financial instrument measurement (IFRS 9 expected credit loss model vs. VAS incurred loss model); and deferred tax (required under IFRS; not required under VAS for many companies). For a foreign parent consolidating a Lithuanian subsidiary, these differences must be understood and the subsidiary’s numbers adjusted for consolidation.

What management reporting typically includes

• Monthly management accounts — balance sheet, income statement, and key metrics on a monthly basis, typically delivered by the 15th of the following month
• Budget vs. actual variance analysis — comparing actual performance to the approved budget with commentary on significant variances
• Intercompany reconciliation — confirming that the Lithuanian entity’s intercompany balances are consistent with the parent’s records
• Cash position and forecasting — current cash balance, short-term cash forecast, and any working capital concerns
• KPI reporting — specific key performance indicators required by the parent (e.g., gross margin, headcount, revenue by product line) that are not part of statutory financial statements
• Consolidation pack — financial data in the specific format required by the parent’s consolidation software (SAP, Oracle, Hyperion, Tagetik, or Excel-based models)
• IFRS-to-VAS bridge — a reconciliation of the VAS annual financial statements to the IFRS consolidated numbers for the purpose of the parent’s statutory audit

Financial Reporting Services We Provide

Financial Reporting Services Pricing

Annual financial statement preparation is priced by company size category. Monthly management accounts are priced by volume and format complexity as part of the accounting retainer.

Frequently Asked Questions