Audit and accounting insights - page 11

Not so long ago I wrote about a certain wrong approach to the valuation of fixed assets (revaluation model). Frequently, in the "revaluation" model, companies measure fixed assets at the fair value and cease to depreciate. Thus, the rules are confused with those that have been established for the valuation of investment properties. This is precisely according to IAS 40 that an entity may measure its investment properties at the fair value and does not need to depreciate. But first things first...

As we financiers and accountants know, the use of IFRS[1] in Poland is not popular (yet); solutions included in the Accounting Act prevail, and with respect to recognising and subsequent depreciation of property, plant and equipment, these are also often solutions derived from the Income Tax Act. But what can we do?   [1] IFRS are the International Accounting Standards, International Financial Reporting Standards and their interpretations issued by the Standards Board in London.

A few years ago, an audit was treated as a necessary evil and another obligation to comply with. Nowadays, auditors are increasingly considered to be advisors, whose knowledge and experience can support the company's operations.

Audit of financial statements by an independent certified auditor is an increasingly important element of communication between audited entities and their investors. It also plays a vital role in creating a sense of security among shareholders and other external actors interested in the company's condition.

Growing competition and a still strong pressure on prices - How do auditors cope in such a difficult market environment? How do they acquire new customers? How is the specificity of the auditor's work changing? Are there new challenges arising?

On 13 January 2016, the International Accounting Standards Board (IASB) issued the new International Financial Reporting Standard No. 16 (IFRS) – "Leases", which supersedes IAS No. 17.

When trading with European Union contractors, domestic entities are obliged to undergo some extra procedures. Before concluding their first intra-Community transactions, taxpayers are supposed to register as EU VAT payers. Therefore, they have to submit the VAT-R form or its sole actualisation in order to be granted the right to use a EU VAT number composed of their Tax Identification Number (Polish NIP) preceded with “PL” code. Even if an entrepreneur is already registered as a UE VAT payer, still, it is not sufficient. The tax authorities have imposed on entities engaged in intra-Community trade an obligation to submit periodical statements concerning concluded intra-Community transactions, commonly known as EU VAT. And yet, are all transactions concluded between EU entities subject to the obligation of being included in the return? Well, not really.

The end of the year is the time of stocktaking and closing of the account books, therefore, it would be thoughtful to get ourselves well prepared for it. If you are in the middle of closing the financial year, please, acquaint yourself with the following schedule to check if you have already performed all your legal duties.

Conducting an assets inventory check is an obligation arising from the Accounting Act (let us remind you that on September 23, 2015, a new Act dated July 23, 2015 on amendments to the Accounting Act and other Acts entered into force [Journal of Laws 2015, item 1333]).

When reviewing financial statements for the year 2014, I could not escape the thought that the National Accounting Standard No. 9 (referred to as NAS 9) 'Director's Report' did not result in any visible improvement in the quality of the elaborated documents. You may still come across reports that are roughly one page long, based on financial data from only two years or simply information that has been pasted straight from the financial statement, perhaps with a little comment saying 'increase/decrease by so and so', without any kind of detailed clarification as to the root cause of such changes. Obviously, this is not to say that the management report should be revealing company business secrets. Still, a more comprehensive approach may be expected here, with the information provided allowing the reader to assess the company's actual condition.