Template-Type: ReDIF-Article 1.0
Author-Name: Marcela Žárová
Title: Could New Accounting Directive Improve European Financial Reporting?
Abstract: Dear readers, over more than thirty years, European regulation of financial reporting is realized by accounting Directives, namely the EC 4th and 7th Directive (78/660/EEC and 83/349/EEC). The Directives have been amended several times, but they have not been subject to a fundamental revision since their issue. New requirements, such as new disclosures and valuation rules, including detailed provisions on fair value accounting, have been added. Requirements have made the Directives difficult to read. Directives haven´t provide the same level of detail concerning different accounting areas. Moreover many options make comparisons of national financial statements from different Member States difficult. As follows from different European procedures, based on research studies, like “Communication on a simplified business environment for companies in the areas of company law, accounting and auditing” and “Project on baseline measurement and reduction of administrative costs”, less attention has been paid to consider whether existing requirements could be simplified or removed. Mentioned studies confirm that amendments have tended to ignore the comparability and usefulness of the financial statements, increased reporting requirements and the number of Member State options. All these facts have ultimately, in the long run, led to increased complexity and regulatory burden for all companies. As confirm other EC Communication from 2008, shortly described as „Think Small First“, this increased burden bears down primarily on smaller companies. The Europe 2020 Strategy aims to make the EU a smarter, more sustainable and inclusive economy. The strategy aims to simplify life for SMEs, which represent up more than 99% of Europe's businesses, and to improve these companies' access to finance. Comparability of accounting information at EU level needed to be improved. Works on modernization, improvements and better comprehensibility of Directives have been finalized this year in the form of newly issued Directive. Directive 2013/34/EU of the European Parliament has been published by European Union EU which covers annual financial statements and consolidated financial statements. This Directive also considered amending Directive 2006/43/EC of the European Financial and Accounting Journal, 2013, vol. 8, no. 2, pp. 4-6. 5 European Parliament and of the Council and repealing EC 4th and 7th Council Directives. New thresholds giving rise to four types of undertakings/groups: micro-undertakings, small undertakings or group, medium-sized undertakings or group, large undertakings or group. There is no EU requirement for small companies to have an audit. The Directive incorporates Directive 2012/6/EU on micro-entities, allowing micro-entities to prepare a very simple balance sheet and profit and loss account with virtually no notes. The Directive also simplifies the preparation of financial statements for small undertakings and groups by reducing and limiting the amount of information to be provided in the notes to the financial statements. Some changes are less restrictive, especially for small undertakings. However, for medium sized and large undertakings or groups, as well as for public-interest entities, the changes like post balance sheet events could become more constraining. Other key changes were introduced into the new Directive: materiality principle (aggregation of accounting information in financial statements if such information is considered as immaterial); definition of control has been extended (dominant influence, control without any shares in the subsidiary); potential consolidation exemption for medium-sized group (exempt for public interest entity). Accounting requirements are simplified and reduced from small and medium-sized private owned companies. Reduced or simplified requirements are not applied for public interest entities. The annual financial statements shall comprise, as a minimum, the balance sheet, the profit and loss account and the notes to the financial statements. Member States may require accounting entities other than small ones to include other statements in the annual financial statements in addition to the balance sheet, the profit and loss account and the notes to the financial statements. The Directive does not require preparation of a cash flow statement. The annual financial statements shall give a true and fair view of the undertaking's assets, liabilities, financial position and profit or loss. Where the application of this Directive would not be sufficient to give a true and fair view of the entities' assets, liabilities, financial position and profit or loss, such additional information as is necessary to comply with that requirement shall be given in the notes to the financial statements. As there were many cross-references between the EC 4th and 7th Directive, merging them is a logical step. Moreover, during consultations PREFACE - Žárová, M.: Could New Accounting Directive Improve European Financial Reporting? 6 with national representatives and public, there was a support for such a measure on the grounds that it would provide clarity, consistency and coherence to the accounting framework for non-listed companies. As most Member States have already adopted an option into their national legislation that exempts small groups from preparing consolidated financial statements. Therefore the Directive confirms this approach and exempt small groups from preparing consolidated financial statements. Merging the EC 4th and 7th Directive, “think small first” approach in the building of merged Directive together with its comprehensibility reflected in the new Directive makes this EU legislation better adapted to the present and future needs of prepares and users of accounting information in financial statements.
Volume: 2013
Issue: 2
Year: 2013
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=97.pdf
File-URL: http://www.vse.cz/efaj/97
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Handle: RePEc:prg:jnlefa:v:2013:y:2013:i:2:id:97

Template-Type: ReDIF-Article 1.0
Author-Name: Vladimír ZELENKA
Author-Name: Marie ZELENKOVÁ
Title: From the Soviet to the French Accounting System# (History of Czechoslovak Accounting before collapse of communist regime and then before division of Czechoslovakia)
Abstract: In the period between 1953 - 1965 the system of Book-Keeping Evidence of the National-Economic Evidence was used in Czechoslovakia, based strictly on the Soviet model of accounting. This system was replaced in 1966 by Singular System for Economic Information. The content followed the post-war Singular System for Business Accounting, which was heavily influenced by Germanic Accounting System. Singular System of Economic Information and later Singular System for Socio- Economic Information (in its two developmental stages) differed mainly by how to integrated financial accounting system and financial and cost center accounting. After the fall of communism in 1989 and the beginning of economic changes, a slightly modified accounting system from before 1990 is being used. It was only in 1993 that the financial system is replaced by a completely new one, based on French accounting.
Keywords: Accounting History, Czechoslovak Accounting, Socialist Accounting
Classification-JEL: M41
Volume: 2013
Issue: 2
Year: 2013
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=98.pdf
File-URL: http://www.vse.cz/efaj/98
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Handle: RePEc:prg:jnlefa:v:2013:y:2013:i:2:id:98
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Template-Type: ReDIF-Article 1.0
Author-Name: Marcela Žárová
Title: Changes in EC Directives and Impact on Presentation of Financial Statements in the Czech Republic#
Abstract: The EC 4th Directive has been in force since 1978, at least till 2001 without fundamental changes. Nearly the same history concerns the EC 7th Directive, firstly issued in 1983. Then new requirements, such as new disclosures and valuation rules, including provisions on fair value accounting, have been added. Less attention has been paid to considering whether existing requirements could be simplified or removed. Research studies confirm that amendments have tended to ignore the comparability and usefulness of the financial statements, increased reporting requirements and the number of Member State options. All these facts have ultimately, in the long run, led to increased complexity and regulatory burden for all companies. European Commission proposed to simplify the 4th and 7th Council Directives as regards financial information obligations and to reduce administrative burdens, in particular for SMEs. This article investigates impact of new Directives´ financial reporting requirements on presentation of financial statements of companies those use local regulatory rules, which should comply with the Directive of June 26, 2013 repealing the 1978 and 1983 Directives and their subsequent amendments, in the Czech Republic. Conclusion from this article might be useful for practice as for the potential future changes in presentation of financial statements or researchers who find out similarities or differences between European accounting systems.
Keywords: EC 4th Directive, EC 7th Directive, Administrative burdens, Presentation of financial statements
Classification-JEL: M41
Volume: 2013
Issue: 2
Year: 2013
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=99.pdf
File-URL: http://www.vse.cz/efaj/99
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Handle: RePEc:prg:jnlefa:v:2013:y:2013:i:2:id:99
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Template-Type: ReDIF-Article 1.0
Author-Name: Simona JIRÁSKOVÁ
Author-Name: Jan MOLÍN
Title: Impact of the IFRS Adoption for Tax Purposes in the Czech Tax Collection#
Abstract: This work is focused on the impact of IFRS adoption for tax purposes in the Czech tax collection in years 2007 - 2011. There were used separate financial statements of these companies for five periods from 2007 to 2011. The most important goal of this work is to characterize the relationship between accounting profit or loss under IFRS and the income tax base and to find out the impact of taxation under profit in accordance with IFRS to total tax collection. We try to answer the main question: how would have changed the total income tax collection if selected companies mandatory using IFRS in their bookkeeping and financial reporting had used IFRS profit or loss without any deductions as a income tax base in years 2007 - 2011.
Keywords: International Financial Reporting Standards, income tax base, tax collection, accounting profit or loss, effective tax rate
Classification-JEL: M410
Volume: 2013
Issue: 2
Year: 2013
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=100.pdf
File-URL: http://www.vse.cz/efaj/100
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Handle: RePEc:prg:jnlefa:v:2013:y:2013:i:2:id:100
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Template-Type: ReDIF-Article 1.0
Author-Name: Michal BOBEK
Title: Provisions in Metallurgical Industry and Financial Crisis
Abstract: The article studies the provisions in the metallurgical industry - the number of financial statements disclosing provisions and the amount of provisions disclosed in financial statements. The aim of article is both to presents the provisions disclosed in the financial statements and to determine the influence of financial crisis on the disclosing of provisions in this industry. The individual types of provisions are analyzed as well. The individual types of provisions are researched concerning the number of disclosed provisions and amount of them.
Keywords: Czech Republic, Financial crisis, Provisions, Metallurgical Industry
Classification-JEL: M19, M41
Volume: 2013
Issue: 2
Year: 2013
File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=101.pdf
File-URL: http://www.vse.cz/efaj/101
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Handle: RePEc:prg:jnlefa:v:2013:y:2013:i:2:id:101
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