SHS Web Conf.
Volume 91, 2021Innovative Economic Symposium 2020 – Stable Development in Unstable World (IES2020)
|Number of page(s)||13|
|Section||Stable Development in Unstable World|
|Published online||14 January 2021|
Conflict between the Accounting Act and Czech Accounting Standards in land
Institute of Technology and Business, School of Expertness and Valuation, Okruzni 517/10, 37001 Ceske Budejovice, Czech Republic
* Corresponding author: firstname.lastname@example.org
The paper deals with the analysis of existing Czech accounting procedures in the case of land accounting. The method of process analysis is used, where the currently valid methodological procedures are examined. The strengths and weaknesses of this methodology are defined. It is found that the accounting and valuation of land according to Czech Accounting Standards is in conflict with the Accounting Act, according to which accounting data should provide a true picture of the status and value of the entity’s assets. The purchase price of the land is entered into bookkeeping and any decrease or increase in value is never accounted for again. In the case of forest land, the value of the land and the value of the plants grown on it are not accounted for separately. The accounting therefore does not provide users with true and current information. The good thing is that these accounting policies do not burden the accounting entity in any way. Furthermore, a proposal for new methodological procedures is presented. According to them, it would be possible to update the accounting data depending on the condition of the land and the development of market prices. Based on an expert opinion, a significant increase or decrease in the current value of the land would be accounted for. In the case of a forest, it would be possible to use analytical accounts to account separately for the condition of the land and the condition of the forest foliage. These new procedures would make it possible to reflect in bookkeeping the actual state of the entity’s assets. However, the disadvantage is the higher financial and time demand. Subsequently, the advantages and disadvantages of the currently effective and proposed methodology are compared.
Key words: accounting procedures / valuation of land / market price / enterprise´s assets / tangible fixed assets
© The Authors, published by EDP Sciences, 2021
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