How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation
Our paper focuses on investment subsidies and the impact of accounting methods on financial ratios. Accounting for investment subsidies in Czechia is subject to national legislation and international accounting standards, such as the IAS20. This standard offers two options for capturing subsidies on...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | deu |
| Published: |
Faculty of Economics University of Rijeka
2024-12-01
|
| Series: | Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu |
| Subjects: | |
| Online Access: | https://www.efri.uniri.hr/upload/1/10-Zden%C4%9Bk_et_al-2024-2.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832582708653457408 |
|---|---|
| author | Radek Zdeněk Jana Lososová Jaroslav Svoboda |
| author_facet | Radek Zdeněk Jana Lososová Jaroslav Svoboda |
| author_sort | Radek Zdeněk |
| collection | DOAJ |
| description | Our paper focuses on investment subsidies and the impact of accounting methods on financial ratios. Accounting for investment subsidies in Czechia is subject to national legislation and international accounting standards, such as the IAS20. This standard offers two options for capturing subsidies on assets – as deferred income or by reducing the book value. Czech accounting legislation allows only the second method mentioned. The essence of our article is to evaluate to what extent the alternative accounting of investment subsidies using accruals would be reflected in the financial ratios. The dataset consists of 277 enterprises that received an investment subsidy. Enterprises are from the agricultural sector that is subsidised for many reasons. The analysis is focused on testing the differences in the financial ratios according to financial statements compiled according to Czech accounting legislation and based on accounting allowed by IAS 20. The results indicate a higher significance of the subsidy for smaller companies. The impact of the change in the accounting procedure on financial ratios was statistically significant; on average, their values decreased by 2.8%. For the smallest businesses, the transition to accounting for subsidies using deferred income would be the most significant, with an average reduction of 5.5%. |
| format | Article |
| id | doaj-art-d16b2b8b60e64076974e480911800101 |
| institution | Kabale University |
| issn | 1331-8004 1846-7520 |
| language | deu |
| publishDate | 2024-12-01 |
| publisher | Faculty of Economics University of Rijeka |
| record_format | Article |
| series | Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu |
| spelling | doaj-art-d16b2b8b60e64076974e4809118001012025-01-29T12:04:26ZdeuFaculty of Economics University of RijekaZbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu1331-80041846-75202024-12-0142250953210.18045/zbefri.2024.2.1How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislationRadek Zdeněk0https://orcid.org/0000-0001-9720-308XJana Lososová1Jaroslav Svoboda2Associate Professor, Faculty of Economics, University of South Bohemia, Studentská 13, České Budějovice, Czech Republic. Scientific affiliation: corporate finances, company analysis. E-mail: zdenek@ef.jcu.czResearch Assistant, Faculty of Economics, University of South Bohemia, Studentská 13, České Budějovice, Czech Republic. Scientific affiliation: agricultural economics. E-mail: lososo-va@ef.jcu.czAssistant Professor, Faculty of Economics, University of South Bohemia, Studentská 13, České Budějovice, Czech Republic. Scientific affiliation: financial accounting, IFRS. E-mail: svo-boda@ef.jcu.czOur paper focuses on investment subsidies and the impact of accounting methods on financial ratios. Accounting for investment subsidies in Czechia is subject to national legislation and international accounting standards, such as the IAS20. This standard offers two options for capturing subsidies on assets – as deferred income or by reducing the book value. Czech accounting legislation allows only the second method mentioned. The essence of our article is to evaluate to what extent the alternative accounting of investment subsidies using accruals would be reflected in the financial ratios. The dataset consists of 277 enterprises that received an investment subsidy. Enterprises are from the agricultural sector that is subsidised for many reasons. The analysis is focused on testing the differences in the financial ratios according to financial statements compiled according to Czech accounting legislation and based on accounting allowed by IAS 20. The results indicate a higher significance of the subsidy for smaller companies. The impact of the change in the accounting procedure on financial ratios was statistically significant; on average, their values decreased by 2.8%. For the smallest businesses, the transition to accounting for subsidies using deferred income would be the most significant, with an average reduction of 5.5%.https://www.efri.uniri.hr/upload/1/10-Zden%C4%9Bk_et_al-2024-2.pdfaccountingsubsidiesassetsifrsias20 |
| spellingShingle | Radek Zdeněk Jana Lososová Jaroslav Svoboda How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu accounting subsidies assets ifrs ias20 |
| title | How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation |
| title_full | How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation |
| title_fullStr | How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation |
| title_full_unstemmed | How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation |
| title_short | How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation |
| title_sort | how accounting for investment subsidies influences financial performance an empirical analysis of ias 20 and czech accounting legislation |
| topic | accounting subsidies assets ifrs ias20 |
| url | https://www.efri.uniri.hr/upload/1/10-Zden%C4%9Bk_et_al-2024-2.pdf |
| work_keys_str_mv | AT radekzdenek howaccountingforinvestmentsubsidiesinfluencesfinancialperformanceanempiricalanalysisofias20andczechaccountinglegislation AT janalososova howaccountingforinvestmentsubsidiesinfluencesfinancialperformanceanempiricalanalysisofias20andczechaccountinglegislation AT jaroslavsvoboda howaccountingforinvestmentsubsidiesinfluencesfinancialperformanceanempiricalanalysisofias20andczechaccountinglegislation |