During its lifetime a company often has to adapt to new circumstances arising from its internal changes or external changes such as legislative amendments. The first thing that comes to mind when hearing the word “reorganisation” is change, something different, something being transformed, rebuilt, or improved. And that makes sense because a reorganisation means substantial changes in the company that are commonly undertaken to simplify or change the group structure, to expand its business, or, conversely, to split off lines of business.

Latvia saw a productive autumn in terms of changes to corporate governance rules. On 11 November 2021, Parliament passed amendments to the Public Person’s Shares and Companies Governance Act, effective from 8 December 2021, requiring large central and local government companies to apply corporate governance principles and prepare various statements in this area.

We have already informed our MindLink subscribers about the new Accounting Act effective from 1 January 2022, which will result in relevant regulations being changed or a new one issued. This article explores the Cabinet of Ministers’ new Rule 590, which explain how a company’s assets and liabilities should be valued in its books and presented in its financial statements if the company or its business unit is dissolved. Rule 590 has been issued under section 21(3) of the new Accounting Act and replaces Rule 583.