The amendment introduces a categorization of accounting entities and consolidation groups. The Act should thus distinguish categories of micro accounting entities, small accounting entities, medium-sized accounting entities and large accounting entities. A similar classification will be used for consolidation groups, i.e. groups of companies controlled by one owner. The amendment should decrease the administrative burden of small and micro units.
For example, a micro unit is an organization which does not exceed at least two of these limits: assets not exceeding 9 million, net annual turnover not exceeding 18 million, and the number of employees for the accounting period of up to 10 people.
The draft includes a new regulation of the single-entry accounting mode and its possible use by designated accounting entities if they meet the stipulated conditions. This applies to non-profit organizations such as associations which carry out mainly socially beneficial activities and which would find it difficult and costly to use double-entry accounting.
The draft also introduces an obligation to prepare and publish a report on payments to governments. According to the explanatory memorandum, this report will be prepared by large accounting entities and public interest entities, primarily due to the greater transparency of payments made to governments. This will apply to accounting entities operating in the mining industry or in logging of primary forests.
While the European directive proposes to amend accounting terminology, replacing "final accounts" with "financial statements" or "annual reports" with "management reports", the Government decided to retain these terms. According to the explanatory memorandum, it does not consider the change to the terminology to be appropriate. Furthermore, these changes to concepts would have to be reflected in a number of other laws.
The amendment also stipulates "public interest entities", up to now regulated by the Auditors Act. These include banks, insurance companies and health insurance companies, as well as all publicly traded companies.
Ing. Radomír Stružinský