General Code of Accounting Standards (CGNC) | Upsilon Consulting

Introduction

Whether you are an entrepreneur, an investor, or simply curious, you have already come across this acronym: CGNC. The General Code of Accounting Standards (Code General de Normalisation Comptable) is the backbone of accounting in Morocco. Adopted in 1992 under Law 9-88, the CGNC establishes the rules that every commercial entity must follow to produce reliable and compliant financial statements. Mastering it is not only a legal requirement — it is a strategic advantage for any company looking to grow, secure financing, and build trust with partners.

Download the CGNC (Official PDF)

History and Adoption of the CGNC

Before 1992, Morocco’s accounting landscape lacked uniformity. Businesses applied disparate methods, making it extremely difficult to compare financial data across companies. Recognizing this problem, the Moroccan legislature set out to equip the country with a modern, coherent accounting framework.

The CGNC was established by Law No. 9-88 concerning the accounting obligations of merchants, enacted by the Dahir of December 25, 1992. This law was the result of several years of work led by the National Accounting Council (CNC — Conseil National de la Comptabilite), the advisory body responsible for accounting standardization in Morocco.

The primary objective of this reform was to harmonize national accounting practices, guarantee financial transparency, and facilitate economic exchanges at both the domestic and international levels. The CGNC drew inspiration from international standards while accounting for the specificities of the Moroccan business environment.

What is the CGNC?

The General Code of Accounting Standards is a document with legal force that defines all the accounting rules in Morocco that must be followed to provide a true and fair view of a company’s financial health. It serves as the single reference framework for all Moroccan economic operators.

Structure of the CGNC

The CGNC is divided into two complementary parts:

• The General Accounting Standard (Norme Generale Comptable — NGC): this component sets out the fundamental principles, valuation methods, rules for presenting financial statements, and the operating procedures for accounts. It is the conceptual foundation of the Moroccan accounting system.
• The General Chart of Accounts for Enterprises (Plan Comptable General des Entreprises — PCGE): this section details the chart of accounts organized by category (classes 1 through 8), standard journal entry templates, and financial statement formats. It is the practical tool that accountants use on a daily basis.

This dual structure ensures both theoretical rigor and operational applicability.

Who Does the CGNC Apply To?

The General Code of Accounting Standards applies to all economic operators in Morocco, regardless of their size or legal form. The following are concerned:

• Commercial companies (PLC, LLC, General Partnership, Limited Partnership, etc.)
• Branches of foreign companies established in Morocco
• Public establishments of an industrial or commercial nature (EPIC)
• Sole proprietorships subject to Corporate Income Tax (CIT) or Personal Income Tax (PIT) under the actual regime
• Cooperatives and economic interest groups

Exceptions: liberal professions, taxpayers under the lump-sum regime, and certain non-commercial public sector entities are not required to apply the CGNC in its entirety.

The 7 Fundamental Accounting Principles of the CGNC

The CGNC enshrines seven accounting principles that form the foundation of all Moroccan accounting standardization. Every entry and every financial statement must respect these principles:

1. Going Concern

The entity is presumed to continue operating for the foreseeable future. Assets are therefore valued at their use value rather than their liquidation value.

2. Consistency of Methods

The accounting methods adopted must be maintained from one fiscal year to the next to ensure comparability of financial statements. Any change in method must be justified and disclosed in the ETIC (notes to the financial statements).

3. Historical Cost

Assets are recorded at their acquisition or production cost at the time they enter the entity. This principle prohibits the free revaluation of assets.

4. Accrual Basis (Independence of Accounting Periods)

Each accounting period must only include the revenues and expenses that belong to it, regardless of the date of actual receipt or payment.

5. Prudence

When a risk or loss is probable, it must be provisioned even if the amount is uncertain. Conversely, potential gains are only recognized when they are effectively realized.

6. Clarity

Transactions and information must be recorded clearly in the accounts, without offsetting between items, to facilitate the reading of financial statements.

7. Materiality

Only information likely to influence the decisions of financial statement users needs to be presented in detail. Non-material items may be grouped together.

The 5 Mandatory Financial Statements

The CGNC requires the preparation of five financial statements at the close of each accounting period. Together, they provide a complete picture of the company’s financial position and performance:

• The Balance Sheet (Bilan): a snapshot of the company’s assets and liabilities at a given date, showing what the company owns and what it owes.
• The Income Statement (Compte de Produits et Charges — CPC): summarizes the revenues and expenses for the period to determine the net result (profit or loss).
• The Statement of Management Balances (Etat des Soldes de Gestion — ESG): breaks down the formation of the result into intermediate balances (gross margin, value added, gross operating surplus, current result, etc.) and calculates the self-financing capacity.
• The Financing Table (Tableau de Financement): analyzes resource and application flows to explain changes in cash position between two periods.
• The Supplementary Information Statement (Etat des Informations Complementaires — ETIC): provides the notes essential for understanding the other four statements, including accounting methods adopted, off-balance-sheet commitments, and details on certain line items.

The Moroccan Chart of Accounts: Structure by Class

Classes 1 through 5 make up the balance sheet accounts, classes 6 and 7 are the income statement accounts (expenses and revenue), and class 8 groups special accounts used for off-balance-sheet commitments and transitional operations.

The Role of the CNC (National Accounting Council)

The National Accounting Council (Conseil National de la Comptabilite) is the institutional body responsible for accounting standardization in Morocco. Operating under the authority of the Ministry of Finance, the CNC fulfills several essential missions:

• Developing and updating national accounting standards
• Issuing opinions and recommendations on the application of the CGNC
• Proposing sector-specific adaptations of the chart of accounts
• Monitoring the evolution of international standards (IFRS/IAS)
• Coordinating convergence efforts between the Moroccan framework and international standards

The CNC therefore plays a central role in the evolution of Morocco’s accounting framework and its adaptation to contemporary economic realities.

CGNC vs IFRS: Key Differences and Convergence

The CGNC and IFRS (International Financial Reporting Standards) share certain fundamental principles but present notable differences:

• Asset valuation: the CGNC favors historical cost, while IFRS allows fair value measurement for many categories of assets.
• Financial statement presentation: the format of CGNC financial statements (particularly the ESG and financing table) differs from IFRS presentation requirements.
• Financial instruments: IFRS provides a highly detailed framework for complex financial instruments, whereas the CGNC remains more general.
• Consolidation: groups listed on the Casablanca Stock Exchange have been required to publish consolidated accounts under IFRS since 2008, while maintaining their individual company accounts under CGNC.

Convergence efforts are underway under the leadership of the CNC, with the goal of gradually aligning the Moroccan framework with international standards while preserving local specificities.

Sector-Specific Adaptations of the CGNC

The CGNC serves as the base framework, but certain sectors have specific chart of accounts adaptations tailored to their particularities:

• Banking sector (PCEC): the Chart of Accounts for Credit Institutions, developed by Bank Al-Maghrib, addresses operations specific to banks (loans, deposits, interbank transactions, counterparty risk).
• Insurance: insurance companies follow a sector-specific chart of accounts that incorporates technical provisions, mathematical reserves, and reinsurance specificities.
• UCITS (OPCVM): Undertakings for Collective Investment in Transferable Securities apply a specific accounting framework adapted to securities portfolio valuation.
• Public sector: public establishments have adapted accounting rules suited to the management of public funds.

All of these adaptations remain rooted in the fundamental principles of the CGNC.

Penalties for Non-Compliance

Failure to comply with the accounting obligations set forth by the CGNC and Law 9-88 exposes companies to significant penalties:

• Tax fines: the General Tax Directorate (DGI) can impose penalties ranging from MAD 5,000 to MAD 50,000 for failure to maintain proper accounting records.
• Rejection of accounts: during a tax audit, accounts that do not comply with the CGNC may be rejected by the tax authorities, which will then reconstruct the company’s turnover and tax base.
• Tax reassessments: the absence of compliant financial statements or failure to observe accounting principles can lead to reassessments with surcharges.
• Criminal liability: in the most serious cases (fraudulent accounts, concealment), company directors face criminal prosecution.

CGNC and Fiscal Obligations

The CGNC is closely linked to the Moroccan tax system. Tax returns (CIT, professional PIT, VAT) are based on data derived from accounts maintained according to the CGNC. Companies must notably:

• File their tax package (balance sheet, CPC, ETIC) with the DGI within three months following the close of the fiscal year
• Comply with the depreciation and provisioning rules set out by the CGNC, which serve as the basis for calculating taxable income
• Retain all supporting documents for a minimum of 10 years
• Ensure consistency between accounting data and tax returns

Properly maintained accounts under the CGNC provide the best protection in the event of a tax audit.

Modernization and Future Outlook

Although the CGNC has been effective for over three decades, it is the subject of ongoing modernization discussions. Among the projects currently underway or under consideration:

• Closer alignment with IFRS for public-interest entities
• Integration of digital accounting and electronic invoicing requirements
• Adaptation to new economic realities (digital economy, intangible assets, crypto-assets)
• Strengthened requirements for extra-financial reporting (CSR, sustainability)

The CNC is actively working on these topics to maintain the relevance and competitiveness of the Moroccan accounting framework.

Why the CGNC is Strategic for Your Business

Beyond the legal obligation, mastering the CGNC offers concrete advantages:

• Legal compliance: avoid penalties and disputes with the tax authorities
• Access to financing: banks and investors require CGNC-compliant financial statements before granting any credit
• Effective management: reliable financial statements enable informed decision-making
• Credibility: standardized accounting reassures commercial partners, suppliers, and clients
• Company valuation: in the event of a sale or fundraising, compliant accounts facilitate enterprise valuation

Conclusion

Standardized accounting under the CGNC is not a luxury — it is a mandatory standard in Morocco. Established by Law 9-88 and built around seven fundamental principles, the General Code of Accounting Standards provides the essential framework for producing reliable financial information. Properly applied, the CGNC becomes a powerful tool for management, tax compliance, and credibility. As a Moroccan chartered accountant, I recommend that all business leaders familiarize themselves with it, even briefly, to better understand their company and optimize their management.

Download the CGNC (Official PDF)