The proposed Act on Financial Operations and Pre-Bankruptcy Settlement went through the first reading and gained a full support of the members of the Parliament. Including some minor changes it will be passed at the next session of the Parliament after the second reading. In principle, the wish of the Croatian Government to establish an order in financial operations deserves respect. The article presents a partial overview of the proposed Act which has 93 paragraphs.
Autor: Dr. sc. Vlado BRKANIĆ , prof. vis. šk., ovl. rač. i ovl. rev.
Through the proposed Act on Fiscalization in Cash Transactions, the Government of the Republic of Croatia wants to establish the total control of the issued bills in retail sales and upon the collection of payments in cash. The Financial Agency will organize a software and hardware support for the needs of the Tax Administration. According to the Government’s proposal, all the persons who issue the bills which are paid in cash should be obliged to fiscalize their cash transactions. Such a general approach is not considered as appropriate due to the fact that large enterprises have already established the supervision of their cash flows. The entire project is rather expensive.
Autor: Dr. sc. Vlado BRKANIĆ , prof. vis. šk., ovl. rač. i ovl. rev.
In the business practice there are frequent business combinations of acquisition of companies, especially limited liability companies. The reasons for this are mostly reduction of costs, an increased market share, tax savings, etc. The author of the article explains the way of acquiring a limited liability company and defines the legal and accounting procedures which are to be performed in such a case. The article also provides an example of the contract on acquisition and the accounting procedures upon the transfer of the assets of the acquired company into the acquirer’s company. Finally, the taxation viewpoint of the above stated procedure is presented in the article, too.
Controlling plays an important role upon transfer pricing between the companies in the same group which operate in different countries. Transfer pricing depends on a number of factors such as the characteristics of the specific local markets, foreign currency exchange rates, specific expenses (e.g. advertising), foreign politics of some countries, etc. A special attention should be paid to the legal regulations referring to the profit tax payment and the possible implications on the total performance of the company.
The last issue of the RRiF Magazine contained the article on the accounting for pig breeding, whereas this article comprises the accounting for production of meat and processed meat. The practical example shows how to record the purchase and consumption of stocks of raw materials and materials, how to make the calculation of production, how to calculate and distribute costs and how to measure the stocks of unfinished production, semi-finished products and finished products, taking into consideration the provisions of the IFRS and the CFRS.
Autor: Mr. sc. Katarina HORVAT JURJEC, dipl. oec. i ovl. rač.
The article analyzes the preparation and application of divisional calculations in the procedural calculation of production. The presented examples show some possible ways of the plain divisional calculations, the calculations with the equivalent numbers and the calculations of the related products, including the systematic accounting for the production costs according to the places and the persons who bear the costs.
Autor: Emica TRCOVIĆ, dipl. oec., prof. i ovl. rač.
Scholarships may under certain conditions be paid without tax liabilities. In the case when legal or physical persons pay scholarships to full time high school or college students, such an amount may be tax exempted. Special records should be kept on the paid scholarships. Scholarships are to be paid on the giro account. Scholarships paid from the state budget are not taxable. The students who receive more than HRK 11,000.00 annually are not considered to be supported family members.
Flow The article deals with the possible and expected changes in the contents and appearance of cash flow reports and notes to financial statements. The presentation of cash flows by means of the direct method is still recommended, which divides the information on the substantial cash flows up to the level which is understandable to the readers of financial statements. The notes to financial statements should contain the information for the complete understanding of the managerial approach to financial statements.
The article describes a business trip order form in which the employer determines the aim, the purpose and the duration of the business trip, including the planned business trip expenses. The business trip order form also includes the data on the means of transportation and compensation for transportation costs. The contents of the business trip order form are determined by the corresponding regulations, whereas its form is not. The article deals with the issuing, calculation and accounting of the business trip order form for domestic travels.
This workshop of budgetary accounting comprises the recording and explanations of the accounting for the way of reducing the receivables in the budget which are not connected with the public revenue and refer to the new regulation which determines their collection or write-off: 1) Written-off receivables (completely or partially), 2) Instalment collection of receivables and 3) Sales of receivables. Upon writing off receivables the amount of the written-off receivables should be recorded on the account 91512 – Changes of Asset Volume. In the case of instalment payment the recording of the calculated interests should be especially considered. They are to be recorded separately from the original income. In the case of the sales of receivables, a special attention should be paid to the time of recording the original income and the possible need for value adjustment of such receivables.
Autor: Mr. sc. Nada DREMEL, dipl. oec., ovl. rač. i ovl. rev.
This workshop of non-profit accounting records and explains the recording of: 1. the received credit on the principle of the allowed overdrawal on the commercial bank account and 2. the cash depositing at the commercial bank. If a non-profit organization uses a credit on the principle of the approved overdrawal on the account of a commercial bank, it would be appropriate that the approved credit amount is accounted for as the increased indebtedness per credit, due to the fact that such an amount shows the exact amount of the received credit in the observed period. However, in practice the overdrawn amount on the account is usually changed into liabilities. Upon cash depositing at a commercial bank, the interests should be attributed to the amount of the deposited cash if the new depositing is increased by such an amount. In such a case it is not necessary for the previous deposit to be returned on the business account.
Autor: Mr. sc. Nada DREMEL, dipl. oec., ovl. rač. i ovl. rev.
Upon the calculation of the income tax and the contributions from salaries certain mathematical errors may occur or there may be some changes of the salary elements, which may result in the overpaid contributions and taxes from salaries, especially if such an information was delayed. As a rule, the final calculations of the income tax are performed after completion of the accounting period, in which the annual tax liabilities are determined and the errors in the calculations made during the year are corrected. However, it is also possible to correct the errors and to receive the return of the overpaid income tax or to settle the less paid tax amount during the accounting period. Due to the fact that the technique of the income tax calculation is rather complex due to its personal and social characteristics, the correction of the errors in the final accounts is also complex. This article explains the way of correcting the errors in calculation during the accounting period.
Autor: Lucija TURKOVIĆ-JARŽA, dipl. oec. i ovl. rač.
The pension insurance in the Republic of Croatia is obligatory for all the persons who perform economic activities, either independently or are employed by the legal or physical persons. The basic right arising from the pension insurance is the right to the retirement due to the old-age, an early retirement, the retirement due to inability to work, the family retirement or the retirement due to the partial inability to work (professional illness). Such a wide spectrum of the rights is financed through the compensations paid from the salaries as the contributions for pension insurance on the principle of the generation solidarity and the individual capitalized savings. The insurance holder on the basis of the generation solidarity is the Croatian Institute for Pension Insurance. In order to fulfil its obligations, the Institute should keep the proper and long-term records on each insured person from the beginning of the insurance till the date of acquiring the right to retirement. The article presents the determined procedures of applying for the insurance, reporting the changes during the insurance period and cancelling the insurance.
Upon making a decision on sales of real estate, one or more, sellers should take into consideration the tax liabilities according to various tax regulations, such as the capital transfer tax, the value added tax and the income tax to be paid by citizens, The ignorance of tax regulations may have bad consequences. Accordingly, before making a decision on the sales it is necessary to be acquainted with the regulations which determine this tax issue and thus know which tax liabilities are to expect. The article presents the tax liabilities which should be taken into consideration by the »common« citizens upon purchase and sales of real estate.
The tax on road motor vehicles and vessels is paid by the legal and physical persons – the owners of motor vehicles and vessels – according to the ruling of the authorized Tax Administration office in view of the residence of the legal or physical person. The tax is to be paid within 15 days after the received ruling, according to the ownership data as at 31 March of the current year. On the new car, purchased in the current year, the tax is to be paid according to the number of months, whereas the tax is not paid on the second-hand car purchased after 31 March of the current year. The tax exemptions refer to performing the registered activities by a car or to the domicile population when using a vessel.
Autor: Mr. sc. Mirjana MAHOVIĆ KOMLJENOVIĆ, dipl. oec.
This column presents an overview of the replies to the questions sent by the subscribers, which have contributed to the rich experience of the RRiF advisors who have helped solving concrete problems and dilemmas in the business practice. The last issue presented some current replies and advice in the field of the commercial law and the law on obligations, whereas in this issue there are some replies from the field of the property law and the labour law.
It is a common case that companies engage an auditor to make just an insight into their financial reports. The standard on review engagements does not require from an auditor to carry out the procedures as in the real audit, but just to review the positions of the financial reports through discussions with responsible persons and analytical procedures. Upon the review of financial reports there is an emphasis on the auditor’s experience and scepticism, i.e. on the fact that the auditor should make the right questions and estimate on the basis of the obtained answers when there is enough evidence to make the correct conclusion.
Autor: Anamarija Miletić , dipl. oec., ACCA i ovl. rev.
The companies obliged to have an audit, should make a decision on the selection of the auditor until the end of September for the current year. The obligation of audit is determined according to the structure of the company, the amount of revenue presented in the profit and loss account for the previous year and the company’s activities. The obligation of audit for limited liability companies and limited partnerships is determined according to the data stated in the financial reports for the previous year. Shareholding companies are obliged to have an audit every year.
1. Prijedlog direktive za učinkovitije sprječavanje poreznih prijevara 2. Francuska povećala djelotvornost u otkrivanju poreznih prijevara 3. Komisija oštrije regulira društva za zaštitu autorskih prava 4. Više novca za obnovu starih industrijskih zona 5. INET: eurozona mjesečari prema gospodarskoj katastrofi 6. Moody’s smanjio izglede za kreditni rejting njemačke i EFSF-a 7. EU kasni s usvajanjem strožih bankovnih propisa
Besides the standard due diligence of a client, the system of prevention of money laundering and financing of terrorism requires in some cases the specific types of due diligence and the repeated annual due diligence of a client. Due to the specifics of such types of due diligence of a client it is necessary to be acquainted with the specific types of due diligence of a client, under which circumstances they are applied and their contents.
Autor: Mr. sc. Nada DREMEL, dipl. oec., ovl. rač. i ovl. rev.
The internal and external circumstances may initiate disturbances and crises in the business operations of a company. Through the permanent analysis of the operations the company’s management has to eliminate such disturbances. In view of the various causes, the author of the article stresses the moral and ethics of business operations by the management and employees. All the employees, especially the management, are responsible for the business operations of the company, whereby the knowledge of the management and employees is especially important.
The new Act on Public-Private Partnership, which was published in July, determines in a more rational way the field of financing the construction of buildings for public purposes. The new Act has shortened and simplified the procedure of approval of the PPP projects, which is given by the special agency. It is expected that the simplified procedure will lead to the increased interest in the PPP projects of foreign investors.
In order to collect the income payments for the budget, which are not regarded as public revenue according to the regulations of the general taxation system, a new regulation was passed, which enables to debtors easier settlement of their liabilities. Such mitigating circumstances comprise a write-off of the debt (basic debt and interests) only for physical persons, a write-off of interests, a delay of payment and instalment payment of the basic debt and interests. Legal persons and the persons treated as legal persons should not miss the deadline for making a claim for the write-off of liabilities for interests which expires on 7 September 2012.
Autor: Mr. sc. Nada DREMEL, dipl. oec., ovl. rač. i ovl. rev.
Under the conditions of the rising economic crisis, the entrepreneurs are frequently faced with the question whether a company director may make a decision on reduction of the employees’ salaries to the minimum amount. The author of the article explains why the employer cannot change the salary determined in the contract on employment according to his/her decision (solution, etc,), but both parties – the employer and the employee – should give their consent on this issue. However, if the employee has not made a consent on reduction of the salary, the employer may cancel some (or all) the contracts on employment (due to economic circumstances), offering a changed contract on employment. The article presents the samples of the annex to the contract on employment and the termination of the contract on employment with the offer of the changed contract.
Due to the high unemployment rate the Government of the Republic of Croatia has taken certain measures in order to solve this problem by passing the Act on Initiating Employment. A special attention is paid to the provisions of the above stated Act that determines the employment of the persons on seasonal jobs in agriculture, which represents a deflection in relation to the employment provisions stated in the Labour Act, including the acquisition of the right to the pension insurance in a legal way. Due to the fact that such persons have the right to pension insurance, it was necessary to make the amendments to the Act on Pension Insurance. The article presents the instruction how to enter such persons into the records of the pension insurance.
Employers and other entrepreneurs are forced to take various measures of rationalization of their business operations by making additional cost savings in order to be competitive and survive on the market. The article provides the answers whether there are some limitations and whether it is possible to organize such a service in the way and volume to satisfy the employer’s needs.
The article analyzes a case from the practice in which the forecasting of the production and sales was achieved through market research and application of the higher forecasting method. The delphi method has shown that the experts’ estimates are more reliable than the method of extrapolation of the past trends.
The new Directive passed according to the Budget Act introduced the system of delay of payment, instalment payment of debt and sales, write-off or a partial write-off of the receivables regarding the budget income. These are budget receivables i.e. the debts of legal and physical persons who do not refer to the public revenue according to the provisions of the general taxation system.
The labour relations in the state and public services are rather complex. Therefore, besides the Labour Act as the main regulation in the field of labour regulations, some specific acts are applied upon determination of the status in terms of labour law. The rights, obligations and responsibilities of the civil servants are determined by the Act on Civil Servants and the regulations based on this Act. The general labour regulations are applied on all the issues which are not regulated by the above stated Act or special acts, the directives of the Government of the Republic of Croatia or other regulations based on the Constitution or collective agreements. If it is not otherwise stipulated, the rights and obligations of the employees in public services are determined by the general labour regulations and the corresponding collective agreements. The substantive rights of the civil servants i.e. the right to severance payment is in more details defined in the Collective Agreement for Civil Servants and Employees. Such a right of public servants and employees is defined in more details by the Basic Collective Agreement for Public Servants and Employees.
Autor: Mirela GLAVOTA, dipl. oec., ovl. rač. i ovl. rev.
The economic policies have accepted the principle that large banks cannot go bankrupt. The recovery of such banks on the account of tax payers leads to the question: Why is the profit private if the loss is socialized? The Swiss market approach offers the answer to this question.
