News Flash

August, 2015

Changes in the Accounting Act in

Hungary from 2016

News Flash I Accace Hungary I Changes in the Accounting Act in Hungary from 2016

Changes in the Accounting Act in Hungary from 2016

The Hungarian Parliament has adopted Bill T/4852 during its plenary session on 23th June 2015 which will

modify Act C of 2000 on Accounting and other financial acts. The legislators were focusing on

harmonizing the Hungarian law with EU directives and IFRS standards – the law will enter into force on

1st

January 2016.

We have emphasized the major amendments in our current newsletter:

Extraordinary items

Dividend payments

Significant share of ownership

Increased value limits

Supplementary Notes

Extraordinary items

Statements will not include extraordinary items

in the same form as they did before – they need

to be among the income and expenditures of

financial transactions. For this reason the

income statement’s pre-tax profit line will

correlate with the profit on ordinary activities.

Dividend payments

Dividends have to be displayed in the

accounting records with the date of the decision,

not the date of the tax year’s report (income

statement) when it was approved. Accordingly,

retain profit line is cancelled and the income

statement’s last income category will be profit

after taxes (meaning it will include only profit

after taxes). The previous business year’s

available accumulated profit reserve

supplemented with the after-tax profit can only

be paid out as dividends, profit-sharing and the

yields on interest-bearing securities if the equity

amount decreased by the tied-up reserve and

positive valuation reserve will not drop under the

subscribed capital’s amount after the

recognition(payout) of dividends, profit-sharing

and yields on interest-bearing securities.

Significant ownership share

In addition to these changes a new type of

ownership is introduced: significant ownership

share is used when ownership exceeds 20

percent in other businesses’ capital. This can be

in the form of securities or other rights. The

purpose of significant ownership share has to be

the contribution to the company’s activities, this

has to be displayed in a new row at financial

investments.

Increased value limits

In order to reduce the administrative duties of

companies, the value limits of annual financial

statements (simplified and consolidated) have

been raised in accordance with EU directives.

Current value limits will be modified as follows:

balance sheet total is raised from this year’s

HUF 500 million to HUF 1,200 billion, the limit

for revenue changes from HUF 1 billion to HUF

2,4 billion. The average employee headcount

remains the same, it will be 50 people as

previously.

News Flash I Accace Hungary I Changes in the Accounting Act in Hungary from 2016

Supplementary Notes

Due to the amendment, the Supplementary

Notes will have to include the type and amount

of income and expenses of extraordinary

amount or occurrence as described in the

accounting policy. Furthermore, return

calculations of financial investments need to be

demonstrated. Another requirement is to include

branches, and average statistical headcount:

wage costs and payroll taxes need to be shown

in a breakdown table by staff groups. It is

sufficient to include employees’ average

statistical headcount in the simplified annual

financial statement.

Should you have more questions regarding the changes of Act C of 2000 on Accounting and other

financial acts, our team of experts will gladly be of your help.

Disclaimer

Please note that our publications have been prepared for general guidance on the matter and do not represent a

customized professional advice. Furthermore, because the legislation is changing continuously, some of the

information may have been modified after the publication has been released. Accace does not take any responsibility

and is not liable for any potential risks or damages caused by taking actions based on the information provided

herein.

News Flash I Accace Hungary I Changes in the Accounting Act in Hungary from 2016

Contact

István Nemecz

Managing Director

E-Mail: Istvan.Nemecz@accace.com

Phone: +36 14123535

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