The impact of changes in accounting regulations on agricultural entities and their business accounts since 2016

Financial accounting in the European Union is harmonized through directives. In 2013 Directive 2013/34/EU of the European Parliament and the Council was issued. It aims to improve the performance of micro and small entities by reducing their administrative burden. The primary requirement of the Directive is to introduce entity size classification. The paper identifies the impact of the transposition of the Directive on the size distribution of agricultural enterprises in the V4 countries and some other countries of the European Union using data from the Amadeus database. In the Czech Republic obligations which are part of financial reporting are determined for agricultural enterprises and their impact on fundamental accounting principles is detected. The implementation of the Directive in the Czech Republic significantly influenced valuation, accounting for and specially reporting of inventories of a company's own activity and capitalization, which are typical for agricultural enterprises. A comparison of the regulation effective until the end of 2015 with the new regulation showed the impact on the amount of profit and turnover, which are also quantified. The degree of harmonization with IAS/IFRS is also examined.O

Significant aspects of the national mergers in the Czech Republic

The paper deals with issues of national mergers carried out in the year 2015 and 2016. The development of the mergers is characterized by the fact that it is a multidisciplinary areas (tax, accounting and legal), in practice the most widespread method is Mergers through consolidation. The analysis is therefore focused just on this type of merger. It examines the development of mergers carried out in the Czech Republic as well as globally. In the global perspective,is processed the number of mergers and acquisitions, and the trends in company transformations are monitored. For the Czech Republic is analyzed the number of mergers, number of merging companies, including their legal form, the number of registered mergers by individual Regional Courts, the date of entries, determination of the appointed date of merger and date of completion of merger project. Consequently are presented features typical of the implementation of national mergers. The paper also examines the relationship between the number of mergers and GDP and PX index from 2002 to 2016.O

Social Responsibility for Insurance Companies

The aim of the paper is to verify the quantity and quality of reporting non-financial information disclosed by commercial insurance companies based in the Czech Republic and foreign commercial insurance companies with branches in the Czech Republic. The obligation to disclose non-financial information was introduced in 2017 by the implementation of Directive 2014/95/EU in Czech accounting legislation. To verify the quantity and quality of reporting non-financial information before and after the implementation of the Directive, a comparative analysis was used, examining the years 2016 and 2020. Key indicators from five main areas of non-financial reporting were identified and subsequently the level of their reporting by insurance companies was monitored. All insurance companies in the CR, divided into three main groups, were analysed. These are insurance companies obliged to disclose non-financial information, insurance companies defined as large entities under the Accounting Act, and a group of other insurance companies. The quality of the information reported was assessed using a scoring scale. At the same time the level of reporting non-financial information in the sector of financial institutions in the Czech Republic was compared with the level of reporting in the V4 countries, Germany, and France. Another part of the research was statistical modelling, which by means of correlation and regression analysis identified which factors influence the quality and the level of non-financial reporting. It was shown that gross written premiums and number of employees have the greatest influence. The research revealed that after the implementation of the Directive, there was an increase in non-financial reporting not only in the group of insurance companies obliged to report non-financial information but also in insurance companies with no obligation to do so. The increase in reporting was therefore not only caused by the implementation of the Directive in Czech accounting legislation but also by the growing trend of social responsibility.O

Contributions Burden on Persons Active in Agriculture in Relation to Pension Aspects

The paper focuses on the area of the burden of contributions to state budget with an emphasis on pension insurance contributions of employees and self-employed persons active in the agricultural sector with regard to the amount of their future retirement pension. The comparison shows that self-employed workers in agriculture contribute to state budget about 2.5 times less than employees with comparable net income. As a result, the level of pensions is insufficient, predominantly for entrepreneurs whose pensions only amount to 39 to 45% of their real net income. On the basis of analysis of results from different models, calculations were made of the necessary monthly contributions to the supplementary pension savings plans that would ensure retirement living standards equivalent to 70% of net income earned during working life. The paper also quantifies redistributive effects by studying pension contributions of persons active in agriculture during their working life and pension withdrawals in retirement. The results are compared with those obtained from a group of employees. Contributions of the self-employed are also compared within the V4 countries. In the conclusion of the paper there are some recommendations that might lead to a reduction in the gap in contributions and better living standards for future old-age pensioners.O

Differences in financial statements of business entities in the Czech Republic

Ministry of Finance in the Czech Republic identifies and defines four types of accounting entities that are engaged in business activities. These are the “normal” business entities, business entities as banks, commercial insurance companies and health insurance companies. For each of these types of entities the Ministry of Finance issued relevant regulations that contain specific accounting policies arising mainly from the specifics of the scope of business activities of these entities. The effects of these specifics are ultimately shown also in the individual parts of the financial statement closing. In contrast the International Financial Reporting Standards (IFRS) and also generally accepted accounting principles of the United States (U.S. GAAP) are valid for all listed entities regardless of their size and scope of activities. The ongoing globalization of the world, transnational mergers and acquisitions of various companies brings the requirements for unification of accounting policies in order to achieve comparability of financial statements closing of companies from different countries, their transparency and completeness of published information in the individual countries. This paper deals with the definition of significant differences in the items of financial statement closing of different types of business entities in the Czech Republic and with the formulation of proposals for individual types of entities, which would contribute to easier orientation and grater comparability for the needs of different users of accounting information

Impacts of Newly Acquired Items Within Business Combinations on the Items of the Financial Statements

This paper is focused on the operations with the company (business combinations). These are those operations that are associated with the formation or dissolution of companies or reorganization of their ownership structure. They are often referred as equity transactions. In the concept of Czech accounting legislation, these are the purchase, sale, investment (deposit) of firms or their parts, and various forms of transformation of enterprises. There are analyzed the accounting practices of recording of these issues under the Czech accounting legislation and International Financial Reporting Standards. Consequently there are identified newly acquired assets and liabilities arising directly in connection with the business combinations. In the conclusion of this paper there are examined the effects of different reporting of newly acquired items in the context of business combinations according to Czech accounting legislation and in accordance with International Financial Reporting Standards on the significant items of balance sheet and profit and loss statement from the material and time point of view

Is fair value currently in compliance with the principle of true and real reflection in the Czech accounting?

Information value of data provided by the accounting is in significant extent dependent on the method of valuation used in accounting of individual economic operations especially on the method of valuation of individual items in the financial statements. Financial expression of the individual value of assets and liabilities of the company (including the balance sheet of the company), as well as the amount of equity, depend just on specific method of valuation of assets and liabilities that each entity used in the accounting system. This fact has also a crucial influence on the overall level of financial analysis since mostly aggregated data in the appropriate valuation gained from various parts of the financial statements are the input data for financial analysis.Certain items of assets and liabilities are valued at fair value at the balance sheet day in the Czech accounting in compliance with the global developments. The concept of fair value in Czech accounting is regulated by Czech Accounting Act in § 27 paragraph 4 and 5. The Czech regulation of the concept of the fair value is based on its detailed definition of the IAS / IFRS, including cases of practical use.The aim of this paper is to answer the question whether currently the fair value in the Czech accounting reflects the reality, based on definition of its content in accordance with applicable legal regulation. Partial aim is to identify specific cases of its application in the accounting of various types of business entities in the Czech Republic in existing practice. The paper also identifies methodological procedure of recording changes resulting from the valuation or revaluation of various types of assets at fair value, including their impacts on the financial statements. An integral part of the paper is the perspective of IAS / IFRS on fair value in accounting, so the definition of the fair value and also there is historical development of valuation of assets according to IAS / IFRS. The concept of fair value as a possible method of valuation of assets in European accounting law is also mentioned

Specifics of the Unearned Premium Reserve in the Accounting of Commercial Insurance Companies

Commercial insurance companies are liable to create, on the basis of risks arising from the fulfillment of the object of their activity, technical reserves, which are used to cover liabilities arising to insurance companies from insurance and reinsurance activity. The paper focuses on the technical reserve which is, in accordance with the accounting-legal regulation, created obligatorily in commercial insurance companies – it is the unearned premium reserve.The paper explores the role and place of this technical reserve in the accounting of the commercial insurance companies based on the analysis of its substance, i.e. the objective definition. The paper is based on the methodology of the accounting, evaluation and methods of determining the amount of the technical reserve which will affect the income from operations as well as income tax base of commercial insurance companies. The paper also studied the method of reporting of unearned premium reserve in accounting according to Czech accounting legislation in comparison with International Accounting Standards (IAS/IFRS). The aim of this paper is to determine the impacts of the creation and application of the unearned premium reserve on some important items of the financial statements, which are mainly the income of operations, equity capital and balance sheet as well as to identify the impacts of different reporting of this reserve according to Czech accounting legislation and in accordance with IAS/IFRS. Performing the analysis of the accounting-legal regulation of the unearned premium reserve in the insurance companies, the analysis of the method of accounting of this reserve and also the comparison of reporting of this reserve according to both mentioned regulations is a prerequisite for the fulfillment of the aim

Accounting methodical approaches of business entities in comparisson to bank accounting and to insurance company accounting in the Czech Republic

Bank and insurance must follow the ACT on Accounting No.563/1991 in their financial statement preparation. Banks must use the special decree of Ministry of Finance for Banks and other financial institution due to their special operations and requirements Czech National Bank. The methodical approach to the valuation and recording of basic items balance sheet in banks and other financial institutions are compatible with IAS/IFRS. As well insurances must use special decree of Ministry of Finance for Insurances due to their special operations – cession of insurance. The paper is concerned with the basic items of balance sheet banks and insurances and its comparations with balance sheets of other business entities