A&CE - Consolidation

Obligation to compile a consolidated financial statement for a consolidated unit lies on an accounting unit that is a trading company and represents either a managing subject, controlling subject or it has a substantial influence on other accounting unit (meaning at least 20% ownership). Accounting unit obliged to compile a consolidated financial statement is deemed a consolidating unit. Accounting unit that is either a managed subject, a controlled subject, or a subject where a consolidating unit has substantial influence, is obliged to submit to compilation of consolidated financial statements. This accounting unit is deemed consolidated accounting unit.

Consolidated unit means a group of accounting units mentioned in the Section 2 of the law "On accounting". These accounting units are being included into a consolidation unit in a procedure regulated by executive legal instructions. Consolidating accounting unit is exempt from an obligation to consolidate if - at the end of a balance sheet day of the accounting period which the consolidated financial statements are being complied for - relevant accounting units based on their last standard financial statements do not exceed or meet at least two out of three listed criteria:

Sum of balance sheets' total assets more than 350 mn CZK; for the purpose of this law balance sheet's total assets mean total assets determined form the balance sheet in valuation unadjusted by items under the Article 26, Section 3,
Net turnover more than 700 mn CZK; for the purpose of this law net turnover means revenues less sale discounts, VAT and other taxes directly linked to turnover,
Average adjusted number of employees including working relationship of a member towards a cooperative more than 250 during an accounting period. The average adjusted number of employees is set on the basis of a specific legal regulation.

CONSOLIDATION ACCORDING TO INTERNATIONAL ACCOUNTING STANDARDS

CONSOLIDATION UNDER VALID REGULATIONS

In the Czech Republic, consolidation under valid regulations depends on the consolidated units' accounting values that have already been showed. That makes showing real market value in consolidated financial statements impossible. However, compilation of consolidated statements is necessary in the case when the company you control or where you have a substantial influence meets the above mentioned criteria according to the Article 22, of the law "On accounting" (balance sheets' total exceeds 350 mn CZK, net turnover exceeds 700 mn CZK, or average adjustable headcount during accounting period exceeds 250) and at least two criteria must be met. Compilation and audit of financial statements belongs to responsibilities of accounting units, which have to release information on their activities.

WHAT ARE WE OFFERING?

Our product is designed for:

Accounting units that are obliged to compile consolidated financial statements based on meeting the criteria, and
Accounting units that do not meet the criteria but want to compile consolidated statements to receive a picture of real economic value of the controlled property.

We are ready to offer you a full range of services of compilation and audit (via our affiliated company) of your consolidated financial statements, that is primarily:

Definition of a relevant consolidated unit that is setting limits for determination of the economic unit included in consolidated statements.
Compilation of consolidated statements under valid Czech regulations as well as under IAS, where

We will transfer all statements entering consolidation to IAS standards,
We will ready all subjects controlled by you for drawing up documents for compilation of consolidated statements,
We will ensure incorporation and transfer of statements of your foreign interests into aggregate consolidate statements,

Compilation of consolidation rules of the parent company including rules for incorporation of foreign interests
Training of your colleagues for correct utilization of consolidation rules,
Audit of consolidated financial statements by our affiliated company in the case we participate at compilation of these statements.