NewsCase StudiesEvents

Hungarian Accounting Act Amendment Now In Force

Also in the news...

Registration of Title to Land at Abuja Geographic Information System, Nigeria

The Federal Capital Territory (FCT) Abuja, Nigeria’s capital is gradually becoming a renowned city in Africa. In recent times, there has been an influx of people into the city and its real estate development and construction sectors are developing at a tremendous pace.

FREE VISA FOR LIFE WITH COMPANY SETUP STARTING AT AED 14,500

Looking to set up your UAE company? How about a visa for life? It might sound too good to be true, but it’s a reality. And the offer ends October 31st.

4 Red Flags You Should Watch Out for When Hiring a Web Design Team

If you want to build traction for your startup, you need to invest in a high-quality website. You also can't afford to make too many mistakes, because a good website costs money.

UK showcases green dozen at Global Investment Summit

The Government reveals the 12 businesses from across the UK who will showcase their green technology and innovations at the Global Investment Summit.

Effective Approaches To Improve Fleet Efficiency For Your Business

Various types of businesses need a fleet, from car rental companies and public utilities to distribution centers, courier companies, and so many others. So, there are tons of enterprises out there that are constantly searching for better ways to enhance fleet efficiency, as any business that utilizes a fleet can ultimately enhance its bottom line if heightened efficiency is achieved.

Hungarian Accounting Act Amendment Now In Force

Back to News

Hungarian Accounting Act amendments regarding mainly the form and content of the Financial Statements (FS) were passed by the government last year, and have been in effect since 1 January 2016

The changes in connection with the form of the FS enable the majority (approx. 97-98%) of Hungarian undertakings to prepare and publish simplified annual FS, since the thresholds have doubled. Those who are obligated to compile consolidated FS and previously had their total assets, net sales revenue and number of employees around the upper limits are now given an administrative facilitation as a result of threshold increases – although not as much as in the case of the simplified annual financial statements.

The principle-based approach of IFRS is still very far from the rules-based Accounting Act, however, we can say that last year’s amendments regarding the content and the definitions used by the Act make it a bit easier for foreign investors to understand the FS under Hungarian rules.

The most important examples to show this include the change in the definitions of parent company that is closely reflecting the IFRS rules, even if there are still differences, and the content of profit and loss statement.

In the future, P&L will no longer detail the so-called ‘balance sheet profit’ that consists of the profit after tax increased by the amount of retained earnings used for dividend declaration and decreased by the dividend declared, but will only show the breakdown of profit after tax.

This is a direct consequence of the changed regulation of dividend accounting that will happen in the year when the dividend has been approved rather than declaring it in the preceding year’s FS, as was previously the case.

Furthermore, extraordinary income and expense can now not be shown separately: items previously qualifying as such will be recorded among other income/expense or financial income /expense, just as according to IFRS.

Along with the now-obligatory compliance with Directive 2013/34/EU of the European Parliament, the Hungarian government has given certain companies the option or the obligation to prepare separate financial statements in accordance with IFRS.

The change is warmly welcomed both from administrative and from business perspectives, as IFRS reporting will result in cost savings and can give investors better comparisons and judgements through transparent, international and well-known principles that may boost competitive edge.


Need more information? Contact our experts in Hungary.

You are not logged in!

Please login or register to ask our experts a question.

Login now or register.