Abstract
This article investigates the impact of IAS 12 on deferred taxes regulation in the Czech Republic, where local accounting regulations includes accounting standards only by names, but not as an output of regular due process and which are not issued by the professional accounting body at all, not even partially. The article deals with the development and description of the Czech accounting system from early nineties of last century till present time as a background for IFRS implementation. Then the article followed subsequent steps of IAS 12 implementation into the hierarchy of legal rules for accounting, starting with the Act on accounting, decree on business entities and Czech accounting standard for deferred taxes. IAS 12 implementation into Czech accounting system is an example of partial and incomplete implementation of IFRS into domestic accounting rules based on different law presumption than under which are IFRS developed. Example of IAS 12 implementation into Czech accounting regulatory system, provide the reader clear demonstration of wrong philosophy how to reach comparable accounting information. Based on the published criticism, the recommendation is not to continue in partial IFRS implementation but make good rule for entities to allow them to choose either full IFRS or domestic rules applicable in compliance with the approach "think small first".
Highlights
Investigating the impact of International Accounting Standards (IAS) 12 on deferred taxes regulation in the Czech Republic, it has to be mentioned the regulatory policy that has been realized over last 20 year by regulatory institutions in Europe
Requirements set out in Directives regulated accounting issued in the period started in 1978 till 1991, couldn’t ensure comparability of financial reporting in publicly traded Community companies and the high level of transparency of accounting information, there was a requirement to apply a single set of high quality international accounting standards for the preparation of their financial statements
Since joining the European Union (EU) all listed companies shall prepare at least their consolidated financial statements in accordance with IASC standards by 2005 at the latest..The Accounting act dealing systematically with obligation to use of IFRS was issued firstly in the year 2004
Summary
Investigating the impact of IAS 12 on deferred taxes regulation in the Czech Republic, it has to be mentioned the regulatory policy that has been realized over last 20 year by regulatory institutions in Europe. The policy is called harmonization, the process of increasing the compatibility of accounting practices by setting bounds to their degree of variation. Local regulations govern, to a greater or lesser degree, the issue of financial statements. Such local regulations include accounting standards which are promulgated by the regulatory bodies and/or the professional accounting bodies in the countries concerned.[1] Despite the harmonization process, there may be systematically different patterns of accounting behavior applicable to various groups of countries (Radebaugh et al, 2006). The article dealt with impact of IAS 12 on deferred taxes in the Czech Republic, where local regulations include accounting standards only by. # The article is processed as an output of a research project Development of Financial and Accounting Theory and its Application in Practice from Interdisciplinary Point of View (registered number MSM 6138439903)
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