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ICT SUPPORT OF THE FINANCIAL STATEMENTS CONVERSION: MAIN METHODS AND THEIR ADVANTAGES/DISADVANTAGES

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Abstract:

EU Regulation No. 16062002 obliges companies listed on the EU stock exchanges to prepare their consolidated financial statements in compliance with IFRS. Many Czech companies are under control of foreign companies issuers of securities listed on EU capital markets. As the voluntary application of IFRS was not allowed until 2010, Czech companies prepared financial statements according to the Czech legislative for statutory purposes. However, for consolidation purposes, they had to provide their parent companies with financial statements prepared in compliance with IFRS as adopted by the EU.

The paper deals with three basic solutions, which can be applied when an entity is engaged in the conversion of financial statements from one set of accounting standards to another set of standards. The first method uses conversion on the financial statements level. The second method applies the conversion on the trial balance level. Finally, some companies prefer to implement specialised accounting software, which enables to record all accounting transactions twice both according to CAS and IFRS. Each method is shortly described and its main cost-benefits are analysed.

Keywords: Conversion of Financial Statements; Czech Accounting Standards; Dual Financial Accounting System; IFRS

Document Type: Research Article

DOI: http://dx.doi.org/10.5848/APBJ.2012.00007

Publication date: January 1, 2012

More about this publication?
  • The International Journal of Management Cases (IJMC) developed in 2002 from its predecessor The Journal of Management Cases, and present case studies across a broad range of management disciplines. The IJMC is the official journal of the CIRCLE Research Centre. CIRCLE (Centre for International Research Consumers, Locations and their Environments) is a virtual research group spreading over 70 universities.
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