Accounting Act Amendment as of 2016

01.12.2015

The long-prepared amendment of the Accounting Act effective as of 2016 was ratified and published in the Collection of Laws in September 2015. The most important areas affected by the amendment are listed below:

·        Wider categorization of accounting units (micro, small, medium and large enterprises) with differing reporting obligations;

·        An obligation for medium and large enterprises to prepare a cash-flow statement and equity changes statement;

·        Micro and small enterprises are to prepare their financial statements in an abbreviated version and do not have to publish an income statement;

·        The philosophical purpose of financial statements is explicitly stated, i.e. to provide information for the economic decisions of external users;

·        Changes in the terminology and classification of consolidation groups;

·        Changes in the allocation of costs to production inventory;

The classification into enterprise types or consolidation groups is based on the criteria of asset value, turnover and number of employees. As a result of these changes, it seems likely that the number of accounting units subject to mandatory consolidation will significantly increase.

Should you have any questions regarding the issues above, please do not hesitate to contact Radek Stein, e-mail: radek.stein@tpa-group.cz.