A company’s financial records provide a fair and true view of its financial state of affairs. Therefore, every company in Thailand must be registered and adhere to the accounting requirements according to the Thai accounting standards and accounting act.
Below, you’ll find a complete overview of accounting in Thailand, including the requirements every business must meet in order to remain compliant with the country’s accounting regulations.
Thailand Accounting Standards
The Thailand Financial Reporting Standards (TFRS) refers to Thailand’s accounting standards. The Thailand Financial Accounting Standards are essentially a set of rules that every business must follow when it prepares and presents financial statements regarding publicly accountable entities.
TFRS for non-publicly accountable entities (NPAE) applies to NPAEs, but NPAEs can choose to apply Thailand Financial Reporting Standards.
There are two accounting standards that can be applied to small- and medium-sized enterprises:
- Thailand Financial Reporting Standards
- Thailand Financial Reporting Standards for Non-pubicly Accountable Entities
International Financial Reporting Standards (IFRS) determine what both TFRS and TFRS for NPAEs entail, and foreign businesses can apply the International Financial Reporting Standards.
What Are Non-pubicly Accountable Entities?
Non-pubicly accountable entities are entities that do not meet the following criteria:
- Owning bonds or equity instruments that are traded in a public market, including an over-the-counter market or foreign or domestic stock exchange, or entities in the midst of submitting their financial statements to securities.
- Entities with the primary business interest being holding assets for a broader group in a fiduciary capacity. Such entities include insurance companies, financial institutions, mutual funds, and security companies.
- Any public company
- Other entities that will be defined in the future
Fundamental Accounting Compliance Requirements for Companies in Thailand
Financial Year-end For Companies in Thailand
31 December is the financial year-end for registered Thai companies. Although the accounting period endures for a full year, newly incorporated companies, companies in their dissolution year, and companies that have altered their method of accounting may have a shorter accounting period.
Any company that wishes to alter its accounting period must file a request and receive a written letter of approval from the Director General of the Revenue Department.
Requirements for Bookkeeping
All company accounts must reflect an accurate image of the assets and expenses of the company and adhere to the Thai Accounting Standards as per the Institute of Certified Accountants and Auditors of Thailand.
The company must prepare and file the overview of liabilities and assets of the company (balance sheet) and all loss and profit accounts at the end of every period and keep all other relevant company documents and accounts at the registered address of the company for a minimum of five years from the closing date. The company may receive an extension of up to seven years from the Revenue Department based on its activities.
Companies must keep the following records, documents, and statements:
- Accounts statement
- Accounting journal
- Payment and receipt records
- Balance sheet
- Profit and loss statements
- Credit card transactions
- Electronic transfer records
- All bank statements, which include cheque records
- External and internal audit reports
These financial accounts, documents, and statements need to be recorded in the Thai language or another language accompanied by Thai, typewritten, written in ink, or printed. Some companies can execute monthly bookkeeping or prepare all the required books and reports annually at the financial year-end.
Financial Statements Required Annually
Written reports conveying the company’s financial performance and business activities are known as financial statements. Government agencies, firms, accountants, etc., often audit companies’ financial statements in order to ensure accuracy for tax, investing, and financing purposes.
A company in Thailand’s financial statements include:
- Profit and loss statement
- Financial position statement
- Statement of cash flow
- Changes equity statement
- Financial statement notes
The notes to the financial statement must include the following information:
- Accounting policies description
- Criteria applied to financial statements preparation
- Any additional information regarding the income statement, balance sheet, changes in equity statement, and statement of cash flow.
Financial Statements Annual Auditing
Whether a company is traded or not, all Thai companies must prepare their financial statements, and an independent certified auditor must audit and certify the statements at the financial year-end.
As an audit opinion is required for tax returns and the submission of financial statements, the audit must provide the business with their opinion on the company’s financial statements.
The board of directors of a public and private limited company must schedule the annual shareholders’ meeting for the approval of the audited documents within four months of the financial year-end.
Once the documents are approved, the company is required to submit them, along with any supporting documents, such as those including the list of shareholders, to the Commercial Registrar and the Revenue Department within a month of the shareholders’ meeting. A penalty of up to 200 000 THB may result if the company fails to comply with the regulations mentioned above.
For public limited companies, the balance sheet must also be published in a newspaper for at least a day within the month of approval at the shareholders’ meeting. Foreign companies, their representative office, branch office, or regional office, are required to submit a copy of the company’s financial statement to the Ministry of Commerce within 150 days after the financial year-end, with or without the approval of the shareholders’ meeting.
Reports Required Annually
Both public and private limited companies are required to provide the documents listed below at the end of every accounting period:
- Balance sheet
- Audited financial statements
- Name of the company
- Directors’ details
- List of all shareholders
- Duration of the annual meeting (in minutes)
- Business types
- Profit and loss accounts
All documents are required to be prepared in the Thai language. A foreign company must attach the Thai translation if it prepares its documents in a foreign language.