National Financial Statements

The Financial Budget Act and the associated Financial Budget Ordinance govern the details of the preparation and reporting of the national financial statements. The national financial statements consist of the income statement, investment statement, balance sheet, cash flow statement, and notes. They provide a true and fair view of the State's net assets, financial position, and earnings situation. The principles of comprehensibility, materiality, reliability, comparability, proper accrual, and consistency apply.

The legal provisions also contain extensive rules governing financial planning. The Government draws up an annual budget for the coming administrative year, which provides information on expected income and planned expenditure and investments. Funds are released once the budget is approved by Parliament. On the basis of the budget, the Government also prepares financial planning for a further three years. To control the budget, the Financial Equalisation Act defines five financial policy benchmarks that identify undesirable developments at an early stage. These benchmarks are defined as follows:

Benchmark 1: The income statement closes with at least a balanced annual result.

Benchmark 2: The absolute growth in expenditure in the income statement does not exceed that of income.

Benchmark 3: The ratio between self-financing funds and net investments is at least 90%.

Benchmark 4: The ratio between financial assets and borrowed funds is at least 420%.

Benchmark 5: The ratio between financial assets and operating expenses is between one and three times.

If the benchmarks cannot be met and non-compliance is not due to one-off, future-oriented additional expenditure or reduced revenue, the Government is required to submit proposals to Parliament for measures to comply with the benchmarks.

Despite numerous challenges in recent years, Liechtenstein's national budget is very well positioned and equipped for the future. Liechtenstein has no public debt, and its national reserves are at the upper end of the range defined in Benchmark 5. This is also confirmed by the independent rating agency S&P Global Ratings, which rates Liechtenstein as one of only eleven countries with the highest rating of AAA with a stable outlook.

More detailed information on the national financial statements and the latest planning reports are available from the Office of Finance.