• Changes of the Act on Accounting 2021
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Changes of the Act on Accounting 2021

11 January 2021

In our leaflet below, you will find a summary of the most important changes of the Act on Accounting for 2021.

Changes in the rules of the accounting of the capital reserve.

Under the current law, companies can specify the date of the change in the change registration application in case of some company information. An exception to this rule is the reduction of capital. The provisions of the Accounting Act, as amended at the end of 2019, concerning the subscribed capital, were aligned with the provisions of the Companies Act, however, this provision was not addressed in the case of the capital reserve. Given the current amendment, the change in the capital reserve can also be accounted with the date of the change. This amendment seeks to ensure consistency between the accounting of the subscribed capital and the capital reserve.

However, the increase in the capital reserve can only be accounted with the date of the registration or with the date of the change, if the related asset has been taken over. This Regulation shall enter into force on the 27th of November 2020.

Changes in the accounting of the remission of the dividend receivable

Section 37 (1) of Act C of 2000 on Accounting has been supplemented, which regulates the items to be shown as an increase in the profit reserve.

The amendment is effective from the 27th of November 2020, according to which the amount of the remitted dividends must be accounted as an increase in the profit reserve with the date of the remission, if the owner’s receivable from the approved dividend is remitted by the owner of the company.

Expanding the net accounting of economic events

The amendment of the law in 2020 expands the range of economic events, that can be accounted for on a net basis in the future.

Expenditure items and related income items arising from these economic events are not needed to be accounted and presented separately in the income statement, instead, their aggregated profit or loss should be presented in the other income or the other expenditure. These changes can be applied to the annual reports of 2020.

Other income should include:

- at the assignor (seller) of the original receivable, the difference between the recognized value of the assigned receivables (which are presented as current assets) and its book value, if the recognized value exceeds the book value at the time of the transfer of the receivable.

- in case of selling fixed and intangible assets, (including if the fixed or intangible assets are not presented in the balance sheet) the difference between the revenues from the sale or transfer, and the booking value of the sold asset, if the revenues from the sale exceed the book value of the asset, at the time of the sale or transfer.

Other expenses should include:

- at the assignor (seller) of the original receivable, the difference between the recognized value of the assigned receivables (which are presented as current assets) and its book value, if the book value exceeds the recognized value at the time of the transfer of the receivable.

- in case of selling fixed and intangible assets, (including if the fixed or intangible assets are not presented in the balance sheet) the difference between the revenues from the sale or transfer, and the booking value of the sold asset, if the book value of the asset exceeds the revenues from the sale, at the time of the sale or transfer.

Imposing a tied-up reserve requirement in connection with transformation.

Pursuant to the change in the law, the tax liability arising directly in connection with the transformation (merger, division) must be covered in the tied-up reserve, if the tax liability is borne by the legal successor and no other cover has been provided.

Conceptual clarification of the definition of the average number of employees.

According to current law, the different limit value calculation methods use different headcount concepts. In order for clear legal interpretation, the term “average number of employees” will be used by the law.

Deadline for the obligation to publish annual reports in the case of listed companies.

According to the Accounting Act, the obligation to publish the annual report must be fulfilled by the last day of the fifth month following the balance sheet date, while the consolidated annual report must be published by the last day of the sixth month following the balance sheet date.

The Hungarian Accounting Act has been amended, according to which the entrepreneur whose securities are traded on a regulated market of any state of the European Economic Area is obliged to deposit its financial statements by the last day of the fourth month following the balance sheet date.

Settlement of a share due to transformation

Pursuant to the provision in force from the 27th of November 2020, the derecognition of the owner's share in the legal predecessor, and the acquisition of the new share in the successor shall be accounted in the accounting records the day after the date of the transformation.

We hope that our summary can help you to understand the law. In case of any unique or special questions, or for detailed consultancy, please do not hesitate to contact us.

konyveles@bdo.hu