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1.2 Users of Accounting Information

External Users​

Investors​

Who they are: Individuals or institutions that own shares or have ownership interest in the business.

What they need:

  • Is the business profitable?
  • Is it growing?
  • What is the return on investment?
  • Are there risks?

How they use it:

  • Decide whether to invest more capital
  • Evaluate whether to sell their investment
  • Assess management performance

Example: An investor considering buying shares in a Luxembourg SARL would review the company's annual accounts filed with RCS to assess profitability and financial health.

Creditors​

Who they are: Banks, suppliers, and other entities that lend money or extend credit to the business.

What they need:

  • Can the business repay loans?
  • What is the debt-to-equity ratio?
  • Is cash flow sufficient to meet obligations?

How they use it:

  • Decide whether to grant loans
  • Set interest rates and credit terms
  • Monitor existing loans

Example: BGL BNP Paribas reviewing a loan application from a Luxembourg SME would analyze the company's balance sheet and cash flow statements to assess creditworthiness.

Tax Authorities​

Who they are: Administration des Contributions Directes (ACD) and other Luxembourg tax authorities.

What they need:

  • Accurate income and expense records
  • VAT calculations and payments
  • Compliance with tax laws

How they use it:

  • Verify tax returns
  • Calculate tax liabilities
  • Ensure compliance
  • Conduct audits

Example: The ACD uses eCDF filings to verify VAT returns and annual accounts to verify corporate income tax returns.

Regulatory Bodies​

Who they are:

  • Registre de Commerce et des Sociétés (RCS)
  • Commission des Normes Comptables (CNC)
  • Other government agencies

What they need:

  • Compliance with accounting standards (PCN)
  • Proper financial reporting
  • Transparency

How they use it:

  • Ensure legal compliance
  • Maintain public records
  • Protect stakeholders

Example: RCS reviews annual accounts to ensure they comply with PCN 2020 standards before accepting the filing.

Internal Users​

Business Owners​

Who they are: Individuals who own and operate the business.

What they need:

  • Is the business profitable?
  • Which products/services are most profitable?
  • Can we afford to expand?
  • Are we meeting our goals?

How they use it:

  • Make strategic decisions
  • Evaluate performance
  • Plan for the future
  • Set prices and control costs

Example: Marie uses her restaurant's income statement to see that lunch service is more profitable than dinner, helping her decide to focus marketing efforts on lunch.

Managers​

Who they are: Employees responsible for day-to-day operations and decision-making.

What they need:

  • Department performance
  • Budget variances
  • Cost control opportunities
  • Resource allocation

How they use it:

  • Manage operations effectively
  • Control costs
  • Improve efficiency
  • Make operational decisions

Example: A retail store manager in Luxembourg City uses sales reports to determine which products to order and in what quantities.

Employees​

Who they are: Staff members at various levels.

What they need:

  • Is the company financially stable?
  • Will there be layoffs?
  • Are bonuses possible?
  • Is the company growing?

How they use it:

  • Assess job security
  • Negotiate compensation
  • Make career decisions

Visit Guichet.lu to see examples of publicly available financial information from Luxembourg companies: https://guichet.public.lu