Decree No. 545 / 2004 Coll.
Decree amending Decree No. 501 / 2002 Coll., implementing certain provisions of Act No. 563 / 1991 Coll., on Accounting, as amended, for entities that are banks and other financial institutions, as amended, as amended by Decree No. 473 / 2003 Coll.
Valid
Order
Effective from 01.01.2005
Text versions:
01.01.2005
29.10.2004
545
DECLARATION
of 18 October 2004
amending Decree No. 501 / 2002 Coll., implementing certain provisions of Act No. 563 / 1991 Coll., on Accounting, as amended, for entities that are banks and other financial institutions, as amended by Decree No. 473 / 2003 Coll.
According to Section 37b of Act No. 563 / 1991 Coll., on Accounting, as amended, ("the Act '), the Ministry of Finance provides for the implementation of Sections 4 (8), 24 (4) and (5) and 28 (1):
Decree No. 501 / 2002 Coll., implementing certain provisions of Act No. 563 / 1991 Coll., on Accounting, as amended, for entities that are banks and other financial institutions, as amended by Decree No. 473 / 2003 Coll., is amended as follows:
1. footnote 3 shall read:
"3) Act No. 256 / 2004 Coll., on Capital Market Business. '.
2. footnote 4 is replaced by the following:
"4) Act No. 189 / 2004 Coll., on Collective Investment. '.
3. footnote 7 shall read:
"7) § 16 of Act No. 189 / 2004 Coll. '.
4. In the second sentence of Article 9 (1), the words "both for trading, sale and even" are replaced by "measured at fair value against cost or income accounts, feasible,"
5. In the second sentence of Paragraph 9 (1), the words "asset-backed debt securities' are deleted.
6. In the first sentence of Paragraph 10 (1), the words "intended for trading or for sale 'are replaced by the words" measured at fair value against cost or income accounts, feasible'.
7. In the third sentence of Article 10 (1), the words "under the heading" 8. Capital "'shall be replaced by" under the heading "8b. Own shares"';
8. In footnote 9, "No 87 / 1997 Coll. 'is replaced by" No 87 / 1995 Coll.';
9. In the second sentence of Paragraph 18 (1), a comma is inserted after the words "repurchase agreements'.
10. in Article 24 (2), the word "basic" shall be deleted;
11. in Paragraph 25 (1), the words "at the time of negotiation of the sale" shall be replaced by the words "at sale."
12. in Article 25 (2), the words "at the time of the buy-in" shall be deleted;
13. in Paragraph 29 (1), the words "viable securities" shall be inserted after the words "at valuation."
14. In Article 29 (1), the words "from available shares, from available units and from available units" shall be inserted after the words "exchange differences in particular."
15. in Paragraph 29 (2):
"(2) Investment firms for their holdings, investment funds and pension funds under item" 13. Valuation differences "further show differences in the measurement of non-operational fixed assets at fair value under special legislation."
16. At the end of Paragraph 33, the sentence "Assets and other assets that an entity has provided as collateral for its own liabilities or for third parties shall be added to the relevant balance sheet items. '
17. Article 34 shall be deleted;
18. In the second sentence of Paragraph 40, the words "securities borrowed 'are replaced by" securities borrowed by an entity'.
19. In the first sentence of Paragraph 44 (1), "interest on repurchase transactions' is replaced by" interest on repurchase transactions'.
20. In the first sentence of Paragraph 44 (2), the words "loans within the framework 'shall be inserted after the words" current accounts'.
21. in the first sentence of Article 44 (2), the words "loans within the framework" shall be inserted after the words "loans received, including";
22. in Paragraph 44 (4):
"(4) An entity shall report accrued assets and liabilities in income or expense from the time of settlement of the transaction, generally using an interest rate that discounting expected future cash flows to maturity or the earliest date of change in interest rate (hereinafter referred to as" effective interest rate '). An effective interest rate may not be used by an entity for items measured at fair value against cost or income accounts with a residual maturity of less than one year at the time of settlement of the purchase, for viable securities with a residual maturity of less than one year at the time of settlement of the purchase, for securities held to maturity with a residual maturity of less than one year at the time of settlement of the purchase, for securities purchased in primary issues not intended to be traded with a residual maturity of less than one year at the time of settlement of the purchase and for issued short-term securities. In such cases, an entity may apply a linear method. The Linear Method may also be used by an entity to recognise interest income on receivables and interest expense on liabilities in periods between instalments, if these periods are less than one year, to report interest income on securities purchased with premium or discount and in other justified cases.'
23. Paragraph 47, including the title, reads:
Profit or loss on financial operations
(1) Item "6. Profit or loss on financial operations" includes, in particular, profit or loss on transactions in securities valued at fair value against cost or income accounts with viable securities recognised under "2. National zero-coupon bonds and other securities accepted by the central bank for refinancing '," 5. Debt securities' and "6. Shares, units and other shares', from short sales, valuation differences of securities. In addition, the item includes profit or loss on hedge derivatives, excluding interest rate derivatives, profit or loss on claims acquired and determined by the entity for trading, profit or loss on the sale of other shares for sale in non-equity companies that are not participants in significant or decisive influence, together with adjustments made for such other shares, profit or loss on securities held-to-maturity together with adjustments made for such securities, profit or loss on foreign exchange activities, gains or losses on other purchase and sale operations related to financial instruments for trading, including precious metals, and gains or losses on non-hedging derivatives. Valuation differences in fair value measurement of available-for-sale securities shall be reported in this item only at the time of the loss of such securities and in cases where it is demonstrated that there has been a permanent impairment of the available-for-sale security.
(2) Investment companies report for their holdings, investment funds and pension funds under item "6. Profit or loss on financial operations" valuation differences of non-operational fixed tangible assets measured at fair value only at the time of its loss. "
24. In the first sentence of Paragraph 48, the words "profit from the transfer of the participation 'are replaced by the words" profit from the transfer of the participation'.
25. In the first sentence of Paragraph 48, the words "income from the transfer of claims' are replaced by" profits from the transfer of claims'.
26. In the second sentence of Paragraph 48, the words "cost of transfer by participation 'are replaced by" loss of transfer by participation'.
27. in Paragraph 50 (4), the word "unappreciated" is replaced by "unappreciated."
28. In Paragraph 50 (5), the word "unappreciated 'is replaced by" unappreciated'.
29. in Article 56 (b) (4), the words "and commitments" shall be inserted after the words "breakdown of assets."
30. in Article 57 (a) (2), the words "in particular use for market creation, speculation, collateral," shall be deleted;
31. in Article 57 (b) (1), the words "to derivatives agreed for the purpose of securing, creating a market or speculating," shall be replaced by "according to the purpose of their use."
32. in Article 57 (b) (2), the words "to derivatives agreed for the purpose of securing, creating a market or speculating" shall be replaced by "according to the purpose of their use."
33.In Article 60 (1) (e), "intended for trading, sale" is replaced by "measured at fair value against cost or income accounts, feasible."
34. in the second sentence of Article 60 (1) (e), the words "to trading or selling" shall be replaced by the words "measured at fair value against cost or income accounts or viable securities."
35. in Article 60 (1) (f), the words "to be traded and sold and issued debt securities with a maturity of up to one year" shall be replaced by "valued at fair value against cost or income accounts and feasible."
36. in Article 60 (1) (o), the words "viable securities" shall be inserted after the words "hedging derivatives."
37. in Paragraph 60 (1) (o), the words "assets and liabilities" are replaced by the words "non-operational fixed assets."
38. Footnote 12 reads:
"12) § 129 of Act No. 256 / 2004 Coll. '.
39. Footnote 13 reads:
"13) Act No. 189 / 2004 Coll. '.
40.
Valuation differences in fair value for securities
(Paragraph 27 (6) of the Law)
(1) Valuation differences in fair value valuation of securities against cost or income accounts shall be reported under the relevant item in the profit and loss account.
(2) Valuation differences in available securities shall be reported under the relevant liability item. At the time of implementation, in particular sales, the aggregate value of the valuation differences shall be reported under the relevant item of the profit and loss account. If there is evidence that there has been a permanent impairment in the value (impairment) of the available security, this loss shall be reported in the relevant item of the profit and loss account without undue delay. ';
41. Paragraph 68a, including the title, reads:
Valuation differences in fair value for non-operational fixed assets
(1) Investment firms shall value non-operational fixed-term tangible assets at fair value in accordance with a specific law for their holdings, investment funds and pension funds. Changes in valuation of such assets shall be recognised under the relevant liability item. In the event of the loss of such assets, the resulting change shall be recognised in the relevant item of the profit and loss account.
(2) Where there is a permanent impairment in the value of non-operational tangible fixed assets, such impairment shall be recognised in the relevant item of the profit and loss account. ';
42. In Paragraph 70, the following sentence is added at the end of paragraph 3: "If, as a result of a secured expected transaction, a non-financial asset, a non-financial liability or a fixed liability is subsequently recognised for which fair value is hedged, the related gains or losses may be recognised together with a non-financial asset or liability. '
43. Paragraph 70 (5) is deleted.
Paragraphs 6 to 8 shall become paragraphs 5 to 7.
44. in Article 70 (5) (c):
"(c) the collateral is effective; the hedge is effective if, at the beginning and during the hedging relationship, changes in the fair value or cash flows of the hedging instrument are equivalent to the hedged risk or, where applicable, total changes in the fair value or cash flows of the hedging instrument between eighty percent and one hundred twenty-five percent of the changes in the fair value or cash flows of the hedged items. An entity shall determine whether the hedge is effective at the beginning of the hedge and at least at the time when the sound, extraordinary and interim financial statements are drawn up and the time when the statements are drawn up in accordance with special legislation. ';
45. in Paragraph 70 (6), the last sentence is deleted;
46. In Paragraph 79 (5), the words "intended for trading or sale 'are replaced by the words" measured at fair value against cost or income accounts and feasible'.
47. Paragraph 79 (7) is deleted.
48. In Part Five, Title IV is deleted.
49. In Annex 4, class 3 to account group 36, the words "Securities for sale 'are replaced by the words" Reportable securities'.
50. In Annex 4, class 3 to the account group 38, the words "to trading 'are replaced by the words" measured at fair value against cost or income accounts'.
Transitional provisions
1. As from 1 January 2005, existing securities for sale shall be treated as viable securities and existing securities for trading shall be treated as securities valued at fair value against cost or income accounts. An entity is entitled to transfer from a group of viable securities to a group of fair value securities against cost or income accounts on 1 January 2005. An entity is entitled to include, on 1 January 2005, debt securities issued in primary issues not intended to be traded on a regulated market in those groups of securities.
2. An investment fund, pension fund or mutual fund managed by an investment company shall be reported under item "14. Undistributed profit or loss from previous periods" on the first day of the financial year beginning on 1 January 2005 and subsequently changes in the fair value of securities, changes in the fair value of derivatives, changes in the fair value of the hedged items of assets and liabilities and exchange differences that have been reported through balance sheet items and pursuant to Sections 68 and 70 of Decree No. 501 / 2002 Coll., implementing certain provisions of Law No 563 / 1991 Coll., on accounting, as amended, for entities that are banks and other financial institutions, as amended by Decree No. 473 / 2003 Coll., as effective from the date of entry into force of that decree, shall be reported through profit and loss statements.
Efficacy
This Decree shall take effect on 1 January 2005.
Minister:
Sobotka v. r.
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Regulation Information
| Citation | Decree No. 545 / 2004 Coll., amending Decree No. 501 / 2002 Coll., implementing certain provisions of Act No. 563 / 1991 Coll., on Accounting, as amended, for entities that are banks and other financial institutions, as amended by Decree No. 473 / 2003 Coll. |
|---|---|
| Regulation Type | Order |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 29.10.2004 |
|---|---|
| Effective from | 01.01.2005 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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