The Act XLI. of 2018 has been announced on 25th July 2018 about the amendment of several tax laws and other relating laws, which affects the accounting rules as well. In our present news we demonstrate the significant changes of the Accounting Act (Act of C of 2000) that come into effect from 1st January 2019, besides we also give details about the already applicable changes from 2018.
Since the law offices are allowed to choose the Act on the Fixed-Rate Tax of Low Tax-Bracket Enterprises („KATA”) they are beyond the scope of the Accounting Act and the newly announced changes specify them among the rules of personal scope as the limited partnerships, general partnerships and sole propreitorships. In parallel with this, the rules of getting out and back to the scope of the law are also expanded.
(Accounting Act 2. §)
Companies that prepare their annual financial statements in accordance with the international accounting standards (IFRS) must ensure that the person, who controls and manages the tasks that fall within the scope of the accounting services and who prepares the annual financial statements and the consolidated annual financial statements, is registered in the registry of accounting services providers for an area of specialisation under IFRS registration.
The reason of the change is that the regulation puts the auditors at a disadvantage who are pausing their membership because of the fact that they answer the requirements of the a professional qualifying exam of the IFRS certificate but lack the professional experience performing auditor’s activities. On the other hand it is also important to emphasize that the certified public accountant (CPA) certification is just the precondition of an IFRS qualification so other conditions must be fulfilled to be registered.
So the amendment, entering into force from 26th July 2018, allows the preparation of financial statements in accordance with IFRS to the auditor who has IFRS qualifications, also who answers the requirements of the a professional qualifying exam of the IFRS certificate, furthermore who has the membership of the Chamber of Hungarian Auditors based on the CPA certification.
(Accounting Act 10. § (6) b))
It is also clarified that the currency of the annual financial statements and the bookkeeping has to be the same as the currency in the company’s instrument of constitution.
(Accounting Act 17. § (5b))
From this forward the changes of the law provide that the expected part of any financially settled non-repayable grant or subsidy, accounted for as other income, received to offset costs (expenditures), shall be shown under accrued expenses and deferred income in order to completely fulfill the matching convention.
It is peculiar to these subsidies that the costs or expenditures are already incurred during the financial year while the income of the subsidy or grant comes in just in the following financial year. Such grant or subsidy shall be cancelled from accrued expenses and deferred income as soon as the subsidy or grant are actually realized, or the contract or financing agreement is failed.
(Accounting Act 33. § (7))
In the books of the owner (shareholder) of a business association, the difference between the value of record of assets, other than securities or shares, expanded the purports to the concessions and similar rights, contributed to the business association and the value defined in the instrument of constitution, if the value specified in the instrument of constitution is higher, shall be shown among other incomes.
(Accounting Act 77. § (3) k))
The value of a transferred (assigned) claim shown among the current assets, acknowledged by the assignee and recognized by the assignor (seller) of the original claim, at the time of the transfer shall be shown under other income.
Just as the book value of a transferred (assigned) claim by the assignor (seller) of the original claim among the current assets, at the time of transfer shall be shown under other operating charges.
(Accounting Act 77. § (3) d) és 81. § (3) f))
Related to the prevoius one the positive difference (representing a profit) between the selling price and the book value of the transferred (assigned) claim shown among the financial investments shall be shown under income from financial transactions and within that under income from financial investments (securities, loans), capital gains.
In accordance with that the negative difference between the selling price and the book value of the transferred claim shown among the financial investments shall be shown under expenses, losses on financial investments (securities, loans).
(Accounting Act 84. § (3) g) és 85. § (1a) e))
The Act declares that other service activities shall include the amount counted as negative income (negative interest) charged by the financial institutions which is equivalent to the fees paid for the maintenance of the deposits and the safe-keeping of money.
Szt. 78. § (4))
A company whose transferable securities are admitted to trading on a regulated market of any Member State of the European Economic Area shall include a corporate governance statement in its annual report. The company shall make available a description of the corporate governance practices to the public. The company shall have the option to make the said description available to the public in the annual report, or by some other means, for instance in a document on the contractor’s website, the address of which is included in the company’s annual report.
(Accounting Act 95/B. §)
Companies active in the extractive industry or the logging of primary forests shall prepare a report on payments made to governments on an annual basis subject to certain conditions. The reformed Act specifies that the informations shall emphasize only the payments resulting from the extractive industry or the logging of primary forests.
(Accounting Act 134/B § (6a))
A change in the cash flow statement is also announced which shall deserve attention during the preparation of the complete set of financial statements of 2019. Long-term loans and bank deposits and the repayment, termination or redemption of these were shown under financial cash flow but from now on they shall be shown under investment cash flow.
(Accounting Act Schedule No. 7)