Law No. 96-112 of December 30, 1996 on the Accounting System for Companies

Laws and decrees on accounting standards – 1996-2000 - 665 LAW NO. 96-112 OF DECEMBER 30, 1996 ON THE ACCOUNTING SYSTEM FOR COMPANIES In the name of the people, Having been adopted by the Chamber of Deputies, The President of the Republic promulgates the law whose text follows:

Chapter One GENERAL PROVISIONS

Article 1. This law establishes the accounting system for companies, as well as the conditions and procedures for its application. The provisions of this law apply to any natural or legal person subject to maintaining accounts under current legislation, except for companies subject, in the maintenance of their accounts, to the provisions of the Public Accounting Code and for companies that meet the conditions set by special legislation for maintaining a simplified accounting system defined by accounting standards.

Article 2 The maintenance of accounts is based on supporting documents and includes the keeping of accounting books as well as the preparation and presentation of financial statements, in accordance with the provisions of this law.

Article 3 Companies may, where applicable, apply an accounting system other than that provided for by this law, subject to authorization from the Minister of Finance and according to conditions set by decree. These companies remain, however, subject to the obligation to maintain the accounting books mentioned in Chapter Three of this law.

Article 4 The accounting system comprises a conceptual framework for accounting and accounting standards. It forms an inseparable whole.

Article 5 A National Accounting Council is established, responsible for examining and advising on:

• draft accounting standards and their application procedures,
• draft legal and regulatory texts containing provisions relating to accounting,
• subjects related to accounting. The Council is also responsible for examining accounting-related questions and proposing means for its improvement. The composition and organizational rules of the National Accounting Council are set by decree.

Laws and decrees on accounting standards – 1996-2000 - 666 Chapter Two ON THE CONCEPTUAL FRAMEWORK AND ACCOUNTING STANDARDS

Article 6 The accounting conceptual framework serves as a guide for the development and interpretation of accounting standards. It supports the treatment of operations related to company transactions and the effects of events linked to its activity that have not been addressed by these standards. The accounting conceptual framework is approved by decree.

Article 7 Accounting standards include a general accounting standard, technical standards, and sectoral standards. Accounting standards are approved by order of the Minister of Finance.

Article 8 The general accounting standard establishes the manner in which financial statements are presented, as well as the chart of accounts, operating rules, and rules relating to accounting organization.

Article 9 Technical standards establish the procedures for handling operations arising from company transactions and the effects of events linked to its activity, by determining the rules for recognizing these operations, their valuation, and their disclosure in financial statements.

Article 10 Sectoral standards establish, where applicable, the procedures for handling operations specific to certain sectors that arise from company transactions and the effects of events linked to its activity.

Chapter Three ON ACCOUNTING BOOKS

Article 11 Companies subject to the provisions of this law must maintain accounting books comprising a general journal, a ledger, and an inventory book. They are also required to prepare a trial balance. The general journal and the inventory book must be numbered and initialled at the clerk's office of the court within whose jurisdiction the company's headquarters is located, or any other competent authority provided by special legislation. The books must be prepared without blanks or alterations of any kind.

Article 12 All operations arising from company transactions and the effects of events linked to its activity that impact its results and financial performance are recorded in the general journal. Registration must be done chronologically, operation by operation and day by day, and supported by supporting documents. Each entry specifies the origin, content, and allocation of the operation, as well as references to the supporting documents. Operations of the same nature, carried out in the same location and during the same day, may be summarized on a single supporting document.

Article 13 Entries from the general journal are posted to the ledger and allocated according to the company's chart of accounts.

Laws and decrees on accounting standards – 1996-2000 - 667 Article 14 The general journal and the ledger may be detailed into as many subsidiary journals and subsidiary books as the company's needs require. Subject to the provisions of Articles 12 and 13 of this law, written documents generated by computer systems may serve as subsidiary books and journals. In such cases, these documents must be identified, numbered, and dated upon preparation by means providing full evidentiary guarantees. In both cases, entries posted to subsidiary books and journals, as well as operation totals and balances, must be consolidated in the general journal and ledger at least once a month.

Article 15 When a company opts for the monthly consolidation method for subsidiary books and journals or for using computer systems to maintain its accounts, a document outlining the accounting organization is prepared. This document includes, among other things, the titles and purposes of documents used for information processing, as well as the linking procedures between these documents and their corresponding supporting documents.

Article 16 The trial balance is prepared periodically and at least once per fiscal year. The trial balance includes operation totals and balances opened in the ledger.

Article 17 The inventory process must be carried out at least once per fiscal year to verify the existence of asset and liability items and ensure their value. Items are grouped in the inventory book according to the nature of each inventoried item and its valuation method. The inventory book is maintained in a manner consistent with accounting standards, enabling the substantiation of all elements of financial statements.

Chapter Four ON FINANCIAL STATEMENTS

Article 18 Financial statements comprise the balance sheet, income statement, cash flow statement, and notes to financial statements. These financial statements form an inseparable whole.

Article 19 Financial statements must faithfully present the company's actual financial position, its performance, and any changes in its financial situation, and must reflect all operations arising from company transactions and the effects of events linked to its activity.

Article 20 The company's financial statements are prepared and presented periodically, at least once a year, in accordance with accounting standards and the provisions of this law. Financial statements are prepared and presented from one fiscal year to the next using the same methods, except for cases specified in the accounting system. Financial statements are recorded in the inventory book.

Article 21 Financial statements are prepared and presented no later than three months following the closing date of the accounting period.

Laws and decrees on accounting standards – 1996-2000 - 668 Article 22 The duration of the accounting period is twelve months. The fiscal year begins on January 1 and ends on December 31 of the same year. However, accounting standards may set a different date depending on the characteristics of certain activities.

Article 23 Companies prepare their financial statements in Tunisian dinars, except for companies authorized under the provisions of Article 3 of this law.

Article 24 In addition to the provisions of previous articles in this chapter, companies that wholly or partially control the management operations of one or more other companies and their financial choices, or that exercise significant influence over their activity's course, prepare consolidated financial statements according to the conditions, procedures, and methods set by accounting standards.

Chapter Five MISCELLANEOUS PROVISIONS

Article 25 Financial statements relating to an accounting period, as well as the related documents, books, trial balances, and supporting documents, must be retained for at least ten years.

Article 26 The accounting documents provided for in Article 25 of this law may be admitted as evidence in court, provided they comply with the provisions of this law.

Article 27 This law applies to the maintenance of accounts for accounting periods opened from January 1, 1997. This law shall be published in the Official Journal of the Tunisian Republic and executed as the law of the State. Tunis, December 30, 1996 Zine El Abidine Ben Ali