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Analysis of Differences in Reporting According to IFRS in SMEs in the Czech Republic and its Influence on Performance Measurement

Libuse Mullerova (), Marie Pasekova () and Dana Kubickova ()
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Libuse Mullerova: University of Economics, Prague, Faculty of Finance and Accounting
Marie Pasekova: Tomas Bata University in Zlín, Faculty of Management and Economics
Dana Kubickova: University of Finance and Administration

ACTA VSFS, 2010, vol. 4, issue 2, 106-125

Abstract: New information technologies, development of international economic cooperation and market interconnection call for the need of multinational, globally applicable and acknowledged accounting standards which will enable to describe the processes taking place on the companies´ level, within the extent of the contemporary knowledge, but especially in a comparable form. These requirements are met e.g. by International Financial Reporting Standards (IFRS) used mainly in Europe. Their fundamental aim is to develop unified, high-quality and understandable global accounting standards. The financial statements prepared according to these standards provide high-quality, transparent and comparable information, which can help the users to make economic decisions. The information disclosed according to full IFRS standards is sometimes too superfluous for users of financial statements of small and medium–sized enterprises (SMEs) and very often the cost of its full consistence exceeds its contributions. Another problem, which is specific for the Czech Republic is that the national legislation does not allow it to specify the income tax base from the statements prepared according to IFRS standards and thus the companies have to prepare the statements according to Czech legislation in parallel, which represents a tremendous administrative burden. The aim of the article is to analyse problem areas in reporting according to IFRS at SMEs in the Czech Republic and to compare their results with the accounting practice in companies which report according to IFRS.

Keywords: IFRS; SMEs; Czech accounting standards (CAS); financial statements; performance measurement (search for similar items in EconPapers)
Date: 2010
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