The directions of development of Polish accounting law
Until recently while examining financial statements of companies, on numerous occasions it was impossible to provide any clear-cut answer to the question whether the Accounting Act justifies any actions not resulting from the above mentioned Act. The valuation of so-called long term building contracts or leasing contracts or the issue of capitalizing costs of outside financing connected with such services may be an example of these actions.
With the Accounting Act amendment that entered into force in 2002, there was a significant decrease in the number of considerable differences between Polish accounting standards and International Accounting Standards (today International Financial Reporting Standards). The Accounting Act states that in matters not regulated by the Act it is allowed to apply both the Polish and International Accounting Standards.
The process of unification of Polish accounting law and adjusting it to international standards is likely to be intensified. The process will certainly be accelerated by Poland’s accession into the EU on May 1, 2004. Under EU regulations, which must be observed by Member States (Regulation of the European Parliament and the Council of the European Union of 2002 on applying the International Accounting Standards and Regulation of the European Commission of 2003), economic entities issuing securities listed on the markets of EU Member States are obliged to submit consolidated financial statements that cover financial reporting periods as of January 1, 2005 and are in compliance with the International Accounting Standards.
Member States (including Poland, effective May 1, 2004) were free to enlarge the range of standards regarding other economic entities. In all probability it can be stated that there will be an increase in the number of companies that in the future may be obliged to prepare financial statements in accordance with the IAS. Even today, many specialists in accounting are convinced that such an obligation should not result from the fact of being listed on a stock exchange, but should have regard to the type of business of a given entity or its entity structure. Thus, in the future such an obligation should be imposed e.g. on banks, insurance companies, investment and pension funds. Additionally, it seems worth considering imposing such an obligation on companies that are partially owned by the State, particularly on companies which are of utmost strategic importance for the economy or according to criteria established by competent bodies.
The process of unification of Polish accounting law and a wider range of applying international standards in accountancy in the future will prove to be beneficial. On one hand, it signifies reaching an important goal of financial statements being informative, reliable, comprehensible for a wide spectrum of potential clients and providing them with information on financial situation and prospect of development. On the other hand, a greater comparison of data will be possible. Applying unified accounting standards in Polish and foreign companies will facilitate comparing their financial situations, which, in turn, should lead to increased movement of capital and investments between Member States. It is of particular importance for Polish companies that are interested in establishing contacts with foreign investors. Additionally, it is significant for the development of the Polish economy.
Mr Jacek Kaczka is a charted accountant and a Manager in KPMG Polska Audyt Sp. z o.o. in Warsaw, Poland. The firm employs approximately 600 people, spread across three offices: in Warsaw, Poznań and Kraków.
The first office in Poland was established in 1990.
With the Accounting Act amendment that entered into force in 2002, there was a significant decrease in the number of considerable differences between Polish accounting standards and International Accounting Standards (today International Financial Reporting Standards). The Accounting Act states that in matters not regulated by the Act it is allowed to apply both the Polish and International Accounting Standards.
The process of unification of Polish accounting law and adjusting it to international standards is likely to be intensified. The process will certainly be accelerated by Poland’s accession into the EU on May 1, 2004. Under EU regulations, which must be observed by Member States (Regulation of the European Parliament and the Council of the European Union of 2002 on applying the International Accounting Standards and Regulation of the European Commission of 2003), economic entities issuing securities listed on the markets of EU Member States are obliged to submit consolidated financial statements that cover financial reporting periods as of January 1, 2005 and are in compliance with the International Accounting Standards.
Member States (including Poland, effective May 1, 2004) were free to enlarge the range of standards regarding other economic entities. In all probability it can be stated that there will be an increase in the number of companies that in the future may be obliged to prepare financial statements in accordance with the IAS. Even today, many specialists in accounting are convinced that such an obligation should not result from the fact of being listed on a stock exchange, but should have regard to the type of business of a given entity or its entity structure. Thus, in the future such an obligation should be imposed e.g. on banks, insurance companies, investment and pension funds. Additionally, it seems worth considering imposing such an obligation on companies that are partially owned by the State, particularly on companies which are of utmost strategic importance for the economy or according to criteria established by competent bodies.
The process of unification of Polish accounting law and a wider range of applying international standards in accountancy in the future will prove to be beneficial. On one hand, it signifies reaching an important goal of financial statements being informative, reliable, comprehensible for a wide spectrum of potential clients and providing them with information on financial situation and prospect of development. On the other hand, a greater comparison of data will be possible. Applying unified accounting standards in Polish and foreign companies will facilitate comparing their financial situations, which, in turn, should lead to increased movement of capital and investments between Member States. It is of particular importance for Polish companies that are interested in establishing contacts with foreign investors. Additionally, it is significant for the development of the Polish economy.
Mr Jacek Kaczka is a charted accountant and a Manager in KPMG Polska Audyt Sp. z o.o. in Warsaw, Poland. The firm employs approximately 600 people, spread across three offices: in Warsaw, Poznań and Kraków.
The first office in Poland was established in 1990.
