From the theoretical point of view the premises on creative accounting assumed that it provided a real review of the information stated in the company’s financial reports. The positive side of the creative accounting is the flexibility used within the accounting regulatory frameworks aimed at the true and fair presentation of the topic to be reported. In practice the creative accounting applied by irresponsible managers can have negative impacts such as drawing up of the reports containing the information which provide a positive picture of the reported topic or even providing a false picture. The audit of the financial reports does not always represent a satisfactory protection from abusment of the creative accounting. To the creditors and investors in their sruggle against the abusement of creative accounting useful is its variant called the forensic accounting. It is conducted by the teams of experts whose goal is to evaluate a true and fair presentation of the topic to be reported. The paper states the examples of creative accounting.
A small or a middle-sized enterprise chooses the principles, rules and procedures which present the effect of business events on the financial position and business success in the best way according to the Croatian Standards of Financial Reporting. The Croatian Standards of Financial Reporting do not comprise the complete area of the International Standards.Therefore, it is not possible either to equate the both standards or to state that they have been completely complied. The Croatian Standards deviate from some demands of the International Standards trying to adjust to the 4th i.e. the 7th EU Directive, respectively. The article stresses the need of defining accounting policies for small and middle-sized enterprises and the effect of such a choice on the financial position and the result of the business operations of the enterprise.
The disposal of packaging and packaging waste is important not only for a specific company but also for the environment and its ecological protection. In July 2008 the Rulebook on Packaging and Packaging Waste was amended through introduction of the new forms Report on Calculation of Disposal Compensation, Calculation of Compensation, which resulted in decreased expenses for subsidy compensation, the changes in work of certified collectors of packaging waste, etc. The article deals with the novelties introduced by the application of the above stated Rulebook.
A company can invest its free cash assets into stocks or bonds or grant a loan to the other company. The goal of investment is always a profit, whereas the types of investments are different. Investments are made on a short term basis into stocks or shares in another company due to a possible rise of their value on the market or on a long term basis due to their dividends (profit share). Investments are often aimed at increasing the share in a particular company and its subsequent take-over. The management makes analysis and compares the risks and potential profit in order to make the best possible decision on investments. In view of their purpose and period the financial assets are divided into the financial assets whose fair value is recognized in the profit and loss account, the investments kept until their due payment, loans and receivables and the financial assets which are available for sales. According to the repayment period the assets can be long term and short term. The author of the article deals with the way of recording long term financial assets.
Taking into consideration market conditions and increased competition, sellers often provide to their customers a delayed payment upon purchase of goods and services. Unfortunately, a certain number of customers are frequently late with the payments of their liabilities, which eventually affects the sellers’ liquidity and the ability of paying their liabilities. Factoring as an alternative model of financing provides the solution of the above stated problem, offering the possibility of selling the receivables, which the customer (debtor) has to pay to the seller, to the financial organization which is called the factoring company. This article deals with the financing models through factoring emphasising the important advantages of such financing compared to other financing models and providing tax and accounting solutions for these business transactions.
Accountants, balance accountants and the management which determines the accounting policies often have doubts regarding the estimating of long term tangible assets: should revaluation – estimate be made per fair value? The practice of the EU member countries is interesting. This article deals with the issue of estimate per fair value i.e. the advantages and disadvantages of such estimate. It includes procedures for real estate, plants and equipment and real estate investments.
The criteria of determining the book-keeping system of a particular non-profit organization are applied according to the Regulation on Accounting of Non-Profit Organizations. It can be either a single or a double-entry bookkeeping system. The basic criteria of determining the obligatory book-keeping system are income and assets. The marginal amount is 100,000.00 HRK. The period in which the realization of these criteria is observed is the year previous to the current reporting year. The author of this article presents the examples of recording business transactions in the book-keeping system of non-profit organizations.
Autor: Mr. sc. Nada DREMEL, dipl. oec., ovl. rač. i ovl. rev.
Employers pay subventions to their employees for various purposes. This includes subventions in case of death, longer sick leaves, disability and alike. According to the tax payment regulations employers can pay some subventions to their employees tax free. This article deals with the way the employees can require such rights from employers.
The employee’s right to health protection and health insurance in case of injuries at work and professional illness is regulated by the Act on Health Insurance of Health Protection at Work. The Act came into effect on 2 August 2006 and has been applied since 1 January 2008. The rights of the insured persons of the obligatory health insurance in case of injury at work and professional illness are exercised by the Croatian Institute of Health Insurance of Health Protection at Work. This represents a novelty compared to the period until 31 December 2007 when health protection was for all the cases regulated by the Act on Obligatory Health Insurance. This article deals with the specifics of the realisation of the rights to the compensation during the sick leave due to the injury at work compared to the other reasons of inability to work.
Modern corporate management needs realistic and objective pieces of information about the financial position, business results and cash flow of an enterprise. Therefore, the external audit is very important, since they provide information to the companies which hired them but also to the others who want to be informed whether the financial reports of a particular company have been presented within the applicable framework of financial reporting. Special audits are regularly performed upon establishment of new companies and increase of their share capital, especially if the share capital comprises the objects and rights. This article deals with the above stated and other types of audit regulated by the law.
The information on the achievement of the breakeven point is essential upon evaluation of investments. The second important information refers to the costs of the invested assets or cost of capital. The cost of capital represents a key element of the total costs and has a strong impact on the profitability in the business process and development of enterprises. Therefore, it is important to forecast the economically rational cost, especially in the process of making business and development decisions, which is to be applied in the analysis and preparation of the IT and document basis for a decision-making.
The Croatian Standard of Financial Reporting no. 11 determines the obligation of recording receivables per present value of the future cash flows under certain circumstances, which means that small and medium-sized companies, which are obliged to apply the CSFR, should take into account the application of the effective interest rate. This article presents a practical way of interest rate calculation.
This paper presents the overall review of the regulations referring to the taxation of companies, which is essential for the joining to the European Union. The term taxation comprises all the contributions referring to the business operations of companies. In order to present the above stated effects in practice the paper states some concrete examples of the companies in the Republic of Slovenia before it entered the European Union. Since Slovenia is a young EU member country it isour opinion that its practical experience can serve as an advice which may help the Croatian companies to adjust easier to the requirements of the entire European market.
This article deals with the receipts of employees and other persons which do not subject to income tax up to the particular amount determined by the Rulebook on Income Tax. Although in practice they are sometimes regarded as the same ones sice their common characteristicis tax exemption, they should be differentiated due to the fact that the receipts determined by the Art. 9 of the Income Tax do not subject to the complete taxation, whereas the receipts determined by the Art. 10 of the Income Tax are taxable up to the particular amount. The difference above this amount is regarded as a salary or other income.
The article is about who and under which conditions is regarded as a physical person within the sports system. It also includes the procedures referring to obligatory insurances, contributions, taxation and alike when physical persons are engaged in sports activities.
During the top tourist season foreign and domestic tourists and other citizens buy products and services in the open. This article explains in a simple way to the providers of goods and services, especially catering and tourist services, under what conditions and in which way they can perform their activities in the open in accordance with the corresponding regulations.
The article contains a few notes regarding the provisions of the new Act on Contributions. The author points out that the provisions of the new Act will be applied on 1 January 2009, whereas till the end of 2008 the provisions of the current Act are to be applied.
Autor: Lucija TURKOVIĆ-JARŽA, dipl. oec. i ovl. rač.
