Changing the accounting period in co-ownership: 5 key points to know

The decision to change the dates of the accounting year is a sensitive subject in co-ownership. Far from being a simple formality, this change can have significant repercussions on financial management and raise objections from co-owners. Here are the 5 essential aspects to take into account.

1. A vote at the general meeting is mandatory

First of all, it is important to emphasize that such a modification cannot be decided unilaterally by the trustee or the union council.. According to the Decree of March 14, 2005, it must be the subject of a vote at the general meeting of co-owners.

This vote ensures that the decision is taken democratically and transparently, with the agreement of the majority of co-owners. It is therefore illegal to change the dates of the exercise without going through this key step.

2. The decision must be duly justified

Another crucial point: the resolution to change the accounting year must be solidly arguedThe trustee is required to provide valid reasons justifying this change.

Legitimate reasons include, for example, the desire to make the financial year coincide with the calendar year to facilitate understanding of the accounts.

On the other hand, Changing the accounting rhythm for the sole purpose of deferring expenditure, concealing budgetary slippages or temporarily avoiding revealing a deteriorating financial situation is not acceptable.. Co-owners must have clear visibility on the reasons and expected benefits of this change.

3. A minimum period of 5 years between two changes

The regulations have provided safeguards to avoid untimely and repeated changes. Thus, once the closing date of the financial year has been postponed, it is not possible to change it again before a minimum period of 5 years.

This mandatory period of stability helps ensure a certain consistency in accounting monitoring, on the one hand. On the other hand, it makes decision-makers more responsible by dissuading them from "playing" with the accounting calendar opportunistically.

It is therefore important to be certain of one's choice before voting for such a change, having carefully measured all its medium-term implications. Because once it has been decided, the co-ownership will have to stick to it for at least half a decade.

4. Danger: a poorly executed modification weakens the accounts

A change of accounting year carried out under poor conditions can seriously weaken the accounting of the co-ownership. This is particularly the case when the transition between the old and the new financial year is poorly anticipated and generates "holes" in the budget monitoring.

For example, if theAGM votes to extend the financial year from 12 to 18 months without providing adequate financing, the trustee risks quickly running out of cash, no longer having a clear basis for calling for funds. This opens a period of great uncertainty where the traceability of expenses becomes very difficult.

These situations of floating accounting, without a stable financial year, are conducive to abuses: expenses incurred without the consent of the co-owners, use of unallocated resources, opaque charge deferrals, etc. The cancellation of the disputed decision is then often inevitable.

5. The injured co-owner may challenge the decision in court.

If the general meeting adopts an irregular change to the accounting year, any co-owner can contest it before the court.

There may be multiple reasons for dispute: lack of serious justification for the change, destabilization of accounting or the budget, failure to respect the deadline between two modifications, poorly defined transition methods, infringement of co-owners' control rights on the accounts…

If the judge recognizes the merits of these arguments, he may pronounce the pure and simple cancellation of the disputed resolution. It is therefore better to tie up this type of decision well legally and in accounting terms to avoid the risks of invalidation a posteriori.

Changing the financial year should never be taken lightly. If poorly designed or carried out without the agreement of the co-owners, it is a decision with serious consequences that can permanently destabilize the accounts and confidence. But if thought through and voted on properly, it can also be a tool for optimization and accounting transparency. It is therefore all a question of method and dialogue.