New balance sheet item10/12/13 / cata_tax-news

Accounting

Given the approaching date for compiling financial statements as of 31 December 2013, we would like to bring to your attention the new and crucial provisions of Decree No. 500/2002, Coll., implementing certain provisions of the Accounting Act for entrepreneurs’ accounting units (hereinafter the “Decree”), which took effect on 1 January 2013.

The amendment to the Decree has introduced a new registered capital item A. IV. 3. Other profit/loss from previous years. Under this item, accounting units must show any differences arising from a change in accounting methods, deferred tax accounted for in the first year when deferred tax is accounted, and corrections of significant errors from previous accounting periods.  

There is also significant change as related to correcting errors that occurred in previous years and to using a different accounting method than in prior accounting periods. As of 1 January 2013, such corrections or changes must not influence the profit/loss of the current accounting period.

Accounting units must describe changes in accounting methods and errors shown under the relevant item in an annex to the financial statements and also reflect the information in the financial statements so that it is comparable.

Accounting units are to decide on the allocation or settlement of “Other profit/loss from previous years” when approving the financial statements.

Certain impacts of accounting corrections in previous years will have to be reflected in additional tax returns.