Loss carry-forward
A loss carry-forward is an uncovered loss from earlier years; for tax purposes it can as a rule be offset against the profits of the following seven financial years.
Definition
For young companies it is a substantial asset: whoever makes losses in the early years pays no or less profit tax in the first profitable years. The offset must, however, be claimed and evidenced in the tax return.
Under commercial law the carry-forward reduces equity. If it exceeds half of the capital and statutory reserves, there is a capital loss — with duties to act for the governing body.
The numbers
- 7 years
- period within which losses can be offset against profits Art. 67 DBG
Where to read it
What the software must be able to do
What is needed is a roll-forward across years and a schedule showing which loss from which year is still open. Whoever keeps only a balance loses sight of the deadlines.
Checked Aug 2026
More terms under Bookkeeping and retention: Accrual principle Accrued liabilities Annual accounts Association accounting Balance sheet Balance sheet total Book value Break-even point Business assets Business expenses Cash book Cash flow statement Cash receipts Contribution margin Cost centre Current assets Debit and credit Depreciation Double-entry bookkeeping Duty to keep accounts EBIT EBITDA Equity Equity ratio Financial year Fixed assets Fixed costs Foreign currency General ledger Gross profit Hidden reserves Income statement Inventory count Journal Journal entry Liabilities Liquidity Membership dues Net profit Opening balance sheet Overheads Pass-through item Prepaid expenses Provision Record-keeping ordinance Reserves Retained profit Simple accounts Swiss SME chart of accounts Tamper resistance Turnover Value adjustment Variable costs Volunteer-run structure Voucher Year-end closing modules