IFRS Versus CZ GAAP: Influence Of Construction Contracts On Financial Indicators

Authors

  • Kristýna Havlová University of Economics in Prague, Department of Strategy

DOI:

https://doi.org/10.37335/ijek.v3i2.33

Keywords:

construction contracts, IFRS, Czech accounting legislation, financial reporting, financial indicators

Abstract

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. 

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Published

2015-12-31

How to Cite

Havlová, K. (2015). IFRS Versus CZ GAAP: Influence Of Construction Contracts On Financial Indicators. International Journal of Entrepreneurial Knowledge, 3(2). https://doi.org/10.37335/ijek.v3i2.33

Issue

Vol. 3 No. 2 (2015): International Journal of Entrepreneurial Knowledge

Section

Research

License

International Journal of Entrepreneurial Knowledge (ISSN 2336-2960) is published by the Center for International Scientific Research of VŠO and VŠPP in cooperation with the following partners:

  • University College of Business in Prague, Czech Republic
  • University of Entrepreneurship and Law, Prague, Czech Republic
  • School of Business and Administration of the Polytechnic Institute of Setúbal, Portugal
  • Faculty of Operation and Economics of Transport and Communications, University of Zilina, Slovakia
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