Ifrs Versus Cz Gaap: Influence of Construction Contracts on Financial Indicators

Open access


In 2009, 117 countries all over the world allowed to prepare financial statements according to International Financial Reporting Standards (IFRS) including the Czech Republic. Between Czech General Accepted Accounting Principles (CZ GAAP) and IFRS are some differences involving reporting of noncurrent fixed assets, leasing, construction contracts etc. Using different accounting procedure we can get different value of assets and assets are one component that is used to calculate the financial performance indicators. Those indicators are then used by investors to assess the financial performance of companies and the application of IFRS instead of CZ GAAP can lead to distinct presentation of enterprise performance. In this paper we examine the influence of construction contract reporting using IFRS and CZ GAAP on financial indicators. IFRS leads to more stable development during the period when the project is in progress. In the last year when the project is finished the figures of both ratios (ROA and Z-score) are getting worse which is due to the lower percentage of the construction that is built in this year.

Act No. 563/1991 Coll., on accounting, as amended.

Bae, K.-H., Tan, H., & Welker, M. (2008, May). International GAAP differences: The impact on foreign analysts. Accounting Review , 83(3), 593-628. doi:10.2308/accr.2008.83.3.593

Barbu, E. M., Dumontier, P., & Feleaga, N. (2014, June). Mandatory environmental disclosures by companies complying with IASs/IFRSs: The cases of France, Germany, and the UK. International Journal of Accounting, 49(2), 231-247. doi:10.1016/j.intacc.2014.04.003

Epstein, M. J., & Roy, M.-J. (2001). Sustainability in action: Identifying and measuring the key performance drivers. Long range planning , 34(5), 585-604. Retrieved from http://naulibrary.org/dglibrary/admin/book_directory/Bus_Admin/1673.pdf

Graham, J. R., Harvey, C. R., & Rajgopal, S. (2005). The Economic Implications Of Corporate Financial Reporting. Journal of accounting and economics, 40(1), 3-73. Retrieved from http://core.ac.uk/download/pdf/6822971.pdf

IFRS Foundation. (n.d.). IAS 11 Construction contracts.

Jennings, M. M. (2003). Ethics and Non-GAAP Financial Reporting. Internal Auditing, 18(6), 37-40. Retrieved from http://media.proquest.com.zdroje.vse.cz/media/pq/classic/doc/499344171/fmt/pi/rep/NONE?hl=us%2Cus%2Cgaap%2Cgaap%2Corigins%2Corigin%2Corigins%2Corigin&cit%3Aauth=Jennings%2C+Marianne+M&cit%3Atitle=ETHICS+AND+NONGAAP+FINANCIAL+REPORTING&cit%3Apub=Internal+

Kislingerová, E. (2010).Manažerské finance (3 ed.). Praha: C. H. Beck.

Kubíčková, D. (2011). Účetní výkazy dle IFRS a bankrotní model Z-score. Journal of Competitiveness, 38-48. Retrieved from http://www.cjournal.cz/files/43.pdf

Márquez-Ramos, L. (2011, September 1.). European accounting harmonization: Consequences of IFRS adoption on trade in goods and foreign direct investments. Emerging Markets Finance and Trade , 47(SUPPL.4), 42-57. doi:10.2753/REE1540-496X4705S403

Pavláková Dočekalová, M., Kocmanová, A., & Koleňák, J. (2015, March 30). Determination of economic indicators in the context of corporate sustainability performance. Business: Theory and Practice , 16(1), 15-24. doi:10.3846/btp.2015.450

Pratt, J. (2010). Financial Accounting in an Economic Context (8 ed.). USA: John Wiley & Sons, Inc. Retrieved from https://books.google.cz/books?id=F2J7ZS_EClMC&pg=PA140&dq=du+pont+financial+reporting&hl=cs&sa=X&ved=0CB8Q6AEwAGoVChMI27SA0LHJxwIVic0UCh3KIwBl#v=onepage&q=du%20pont%20financial%20reporting&f=false

Ramanna, K., & Sletten, E. (2009). Why do countries adopt International Financial Reporting Standards? Harvard Business School Accounting & Management Unit Working Paper.

Seay, S. S. (2014). The economic impact of IFRS---a financial analysis perspective. Academy of Accounting and Financial Studies Journal, 2, pp. 119-140. Retrieved from http://search.proquest.com.zdroje.vse.cz/docview/1532759978/fulltextPDF/68D3207057B64C44PQ/1?accountid=17203

Strouhal, J., & Deari, F. (2011). Measurement of accounting harmonization in the Czech Republic, Macedonia and Albania. 10th WSEAS International Conference on Instrumentation, Measurement, Circuits and Systems, IMCAS'11, (pp. 90-94). Venice. Retrieved from http://www.wseas.us/e-library/conferences/2011/Venice/IMCAS/IMCAS-15.pdf

Sucher, P., & Jindřichovská, I. (2004). Implementing IFRS: A Case Study of the Czech Republic. 1(1), 109-141. Retrieved from http://www.adoptifrs.org/uploads/Czech/Implementing%20IFRS%20A%20case%20study%20of%20the%20Czech%20Republic.pdf

Journal Information


All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 249 245 13
PDF Downloads 99 98 8