At the start of the new year, businesses should not only start closing the previous financial year, but should also look at what changes to financial accounting laws and government regulations they need to incorporate into their operations. In 2023, there are also changes for which companies have 90 days, otherwise they can expect a default fine of HUF 500,000 during a tax authority investigation," points out Anett Pető-Szűcs, accounting consultant at ICT Business Advisory Zrt.
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With effect from 01.01.2023, the Accounting Act (2000 C. tv.) and the Government Decree on the specificities of the reporting and accounting obligations of certain other organisations (479/2016 (XII.28.)) have been amended and supplemented in more than 40 places since the previous update of the regulations.
Companies have 90 days to update their accounting rules following the changes in the law. It is not worth taking the risk, as incorrect or omitted regulations can result in a default fine of HUF 500,000 imposed by the Tax Authority.
Furthermore, the compliance of the regulations is also checked during the annual audit, so neglecting them can be a risk factor not only during an audit by the tax authority, but also when issuing a qualified report - points out Anett Pető-Szűcs, accounting consultant at ICT Business Advisory Zrt.
What are the main changes in accounting policies?
- In the case of a spin-off company, the form of the accounts (turnover, balance sheet total, number of employees) must be established in accordance with the rules applicable to a company without a predecessor.
- Ownership interests in health, social, cultural and educational institutions must be shown as other permanent ownership interests, even if they are not ownership interests within the meaning of the law.
- As an accrual only the part of the grant not yet accounted for
(Previously, the full amount of the subsidy not yet accounted for could be accrued.)
- The amount recognised as a long-term lease liability should not include the amount of any repayments due in the following year. Thus, the repayment due in the financial year following the balance sheet date of the finance lease liability recognised as a non-current liability should also be recognised as a current liability in the balance sheet, in accordance with the general requirements for liabilities.
- Enterprises preparing simplified financial statements may, in certain cases, depart from the statutory requirements for the content of the notes to the financial statements - in such cases, the enterprise is required to disclose any departures and their effects in the notes.
- A new reporting requirement for companies reporting under IFRS: an enterprise must publish and file not only the financial statements, but also a report on amounts paid to governments (consolidated report) and reports containing corporate tax information.
- The provisions on supplementary payments have been extended to the "contractor". Thus, in addition to companies, it also applies, for example, to cooperatives.
- The definition of an economic operator has been broadened, so that not only entrepreneurs, public bodies, other organisations, the National Bank of Hungary, health and educational institutions, but also cultural institutions are now considered as economic operators.
- In the balance sheet of the successor in title resulting from a transformation, the provision for taxes on transformation and the remission of any previous additional levy must be recorded in the profit and loss account.
- Definition of number of employees: The simplified average number of employees is the average statistical number of employees.
- The auditor's report should also include information on the compliance of the accounts with statutory requirements and a report on corporate tax information.
