Saturday, 27 March 2010: 14:30
Small and Medium-sized Enterprises (SMEs) play an important role in EU economy. However, their mutual activities are limited by various difficulties. One of the biggest problems is the fact that each of the 27 countries has a different accounting system. From this point of view it is useful to harmonize the systems. The best tool for this harmonization is IFRS for SMEs as a set of rules which can be used for making financial reports of the company. The advantage of such standards should be building them on IFRS principles however they will not be as complicated as full IFRS financial statements. That is very important for SMEs as they do not have large capital so they need to use all financial, informational and personal sources effectively. So far SMEs in the Czech Republic do not use full IFRS standards very much. Except the above mentioned demandingness, IFRS differ considerably from the Czech national accounting system. Moreover, the Czech tax legislation does not accept business results calculated according to IFRS as a basis for income tax calculation and thus reporting according to IFRS is something extra to Czech financial statements. On the other hand, more and more SMEs are starting to report according to IFRS because they are more and more linked to the surrounding world due to capital connections, customer/supplier relations or external financing by banks. Issuing IFRS for SMEs would simplify reporting of these enterprises, using a common standard. This article deals with main problems the Czech SMEs have when reporting according to full IFRS standards. Theoretically set topics are compared with the results of our hitherto research in chosen enterprises.