All company’s accounting and finance departments are extremely busy at the beginning of the year because this is when the accounting changes and rules that became effective at year-end are being implemented and applied in the company’s accounting and audit systems. The most significant accounting changes that will affect firms in 2023 are summarized below.
Reports and required audits of businesses formed through separation
Upon separation, the company founded by way of separation shall be subject to the same provisions applicable to businesses established without a predecessor. This holds true regardless of the company’s financial statement format or if an audit is required.
Ownership stakes in institutions for healthcare, social, cultural, and educational purposes
If an ownership interest differs from the legal definition, it must be stated in the financial statements as another long-term ownership interest. This also applies to ownership interests in healthcare, social, cultural, and educational institutions. Ownership interests must first be recorded in the books against equity equal to the equity amount noted on the institution’s most recent balance sheet.
A change in an entity’s definition
Cultural institutions are now considered entities under the Accounting Act. This implies that moving forward, the forming organization may decide to require an audit of cultural institutions as well.
Financial lease liabilities’ total amount
The difference between the amount invoiced and the installment payable in the financial year following the balance sheet date will be the amount of additional long-term obligations that the lessee is required to state regarding investment projects carried out through a financial lease. The wording has effectively been clarified in this case so that the installment due the next year must be subtracted and recorded as a liability for short-term obligations.
Exceptions to the Accounting Act’s requirements
Companies that provide simplified financial statements and depart from the Accounting Act’s requirements must explain each such departure. It is also necessary to present the effects of variations on assets, liabilities, financial position, and earnings.
Postponement of subsidies
If an entity qualifies for a subsidy, the predicted subsidy amount that is commensurate to the already-incurred costs (expenditures) but has not yet been recognized may be shown as a prepayment against other income. Naturally, for this to be applicable, the company must be able to demonstrate that the conditions of the subsidy will be met and that it is likely that the subsidy will be awarded. When the received subsidy is acknowledged or when the subsidy fails, such prepayment must be derecognized.
Additional capital contribution requirements
According to the Accounting Act, businesses—which now include cooperatives in addition to other business organizations—are also subject to the provisions on additional capital contributions. Businesses are being used instead of the previous terminology, which only referred to business organizations. Cooperatives have also been eligible for further capital contributions under the Civil Code, and they are included in the definition of a business.
Modifications to the headcount definition
The average statistical headcount is what the law refers to as “headcount.”
Reports from independent auditors that have had their content changed
The prerequisites for auditor’s reports have changed in accordance with the provisions of the relevant EU legislation. As a result, the auditor must make a conclusion regarding whether the financial statements are in compliance with the law in their report.
IFRS financial statements have been updated.
Businesses that prepare IFRS financial statements must also consider the specifications for reports on payments to governments and reports including information on corporate income tax when drafting their financial statements.
Improvements to the transformation balance sheets of successors created by transformation
Amounts for the reserve for taxes resulting from the transformation and the recognition of the waiver of further capital contributions are now included in the provision on calculating the amount of the profit reserve to be stated in the successor’s balance statement.
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