Audit and accounting insights - page 9

Each of us - both privately and professionally - uses the Internet more and more. According to surveys from 2017, Poles spend almost 6 hours a day on the Internet on average. From March 15, 2018, entrepreneurs will have the opportunity to stay on the Internet even longer due to the possibility of establishing direct contact with Economic Courts through electronic access to the National Court Register (NCR). The Act of January 26, 2018 Amending the Act on the National Court Register and Certain Other Acts (hereinafter referred to as the Act on Changing the National Court Register) is in force, and is currently awaiting publication in the Journal of Laws of Poland and which will come into force from March 15, 2018.

The suspension of a business activity causes a great deal of doubt on the part of the taxpayer, not only in the issue of the settlement of taxes and social insurance, but also in keeping the revenue and expense ledger. Let's take a closer look at the obligations that are connected with the taking of this decision and what simplifications the provisions foresee.

In the previous part of our considerations, we raised the issue of simplifications in the application of IFRS 16, when assets and liabilities are not recognized. Entities benefitting from the simplifications charge payments directly into costs - usually, on a straight-line basis over the period of the lease. Operating leases are settled in a similar manner (in accordance with the IAS 17 regulations, still in effect). For the record, below please find a handful of information.

In the previous article devoted to leasing, several sample questions were asked by members of management boards and accountants regarding the recognition, valuation and presentation of leasing under the new IFRS 16 standard. Below please find the answers to the inquiries received.

For several months now, we have been noticing an increased activity among entities in the area of inquiries regarding the issue of leasing, as well as the analysis of contracts they signed for the use of certain assets – be it in the form of a lease, rental or tenancy. The emerging questions have hastened the decision to write several entries about the new IFRS 16 standard.

Peter is a young physiotherapist. We have known each other for years. Listening to his business ideas, I have always envied his devotion to new projects and challenges. So when he asked me two years ago what he should do to enter the market and minimize costs at the same time, I started investigating the subject in question. And I will gladly share the conclusions of my investigation with you.

The main task of financial reporting is to provide information about an entity's financial position to any interested parties (stakeholders). In order to meet this requirement, financial statements should present a fair and true picture of the condition of the entity’s assets and liabilities, its financial position and financial result. How does one understand such a statement?

The process of liquidation is, no doubt, a complicated one and many important aspects, such as valuations, provisions, appropriate reports and proposals for reporting changes cannot be omitted. Sometimes these procedures last for several months and sometimes even for several years. However, upon receipt of the entry with the deletion of the company from the National Court Register, we can assume that the company’s liquidation process has been successfully completed.

It is worth considering whether the spread of outsourcing services by the so-called service organizations and the increase in the number of companies that provide such solutions is also followed by adequate attention to ensure that internal controls within an outsourcing company are appropriately designed and, more importantly, properly implemented so that a user organization is comfortable that the risk is limited to an acceptable level.

The company's activity, including the acquisition and production of assets, is often financed from external sources (loans or credits). Such type of financing involves the payment of interest and other costs associated with the borrowing of the funds, i.e. the borrowing costs.