How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60076658%3A12510%2F24%3A43908510" target="_blank" >RIV/60076658:12510/24:43908510 - isvavai.cz</a>

Výsledek na webu

<a href="https://www.efri.uniri.hr/upload/1/10-Zden%C4%9Bk_et_al-2024-2.pdf" target="_blank" >https://www.efri.uniri.hr/upload/1/10-Zden%C4%9Bk_et_al-2024-2.pdf</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.18045/zbefri.2024.2.1" target="_blank" >10.18045/zbefri.2024.2.1</a>

Jazyk výsledku

angličtina

Název v původním jazyce

How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation

Popis výsledku v původním jazyce

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%.

Název v anglickém jazyce

How accounting for investment subsidies influences financial performance: an empirical analysis of IAS 20 and Czech accounting legislation

Popis výsledku anglicky

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%.

Druh

J_imp - Článek v periodiku v databázi Web of Science

CEP obor

—

OECD FORD obor

50205 - Accounting

Projekt

—

Návaznosti

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Rok uplatnění

2024

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název periodika

Zbornik Radova Ekonomskog Fakulteta u Rijeci-Proceedings of Rijeka Faculty of Economics

ISSN

1331-8004

e-ISSN

1846-7520

Svazek periodika

42

Číslo periodika v rámci svazku

2

Stát vydavatele periodika

HR - Chorvatská republika

Počet stran výsledku

24

Strana od-do

509-532

Kód UT WoS článku

001394683800010

EID výsledku v databázi Scopus

2-s2.0-85218253256