Rulebooks for the implementation of the new Law on Accounting have been published

The Minister of Finance adopted seven rulebooks related to the implementation of the new Law on Accounting:

  • Rulebook on Chart of Accounts and contents of accounts in the Chart of Accounts for companies, cooperatives and entrepreneurs
  • Rulebook on the content and form of financial reports and the content and form of statistical report for companies, cooperatives and entrepreneurs
  • Rulebook on Chart of Accounts and contents of accounts in the Chart of Accounts for other legal entities
  • Rulebook on the content and form of financial report and content and form of statistical report for other legal entities
  • Rulebook on the manner and deadlines for conducting the inventory and reconciliating the bookkeeping balance with the actual balance
  • Rulebook on the manner of recognition, valuation, presentation and disclosure of positions in individual financial statements of micro and other legal entities
  • Rulebook on the manner of keeping and content of the Register of Accounting Service Providers.

The Ordinances are applicable for the financial statements prepared on 31.12.2021, except for the Rulebook on the manner of keeping and content of the Register of Accounting Service Providers which is to be applied from 1.1.2021.

Which entities are required to have a statutory audit

We would like to emphasize that the Ministry of Finance published the opinion number 011-00-1089 / 2019-16 on December 17, 2019, which indicates and reminds that it is prescribed that the statutory audit is mandatory for regular annual financial statements of large and medium-sized legal entities classified in accordance with the law governing accounting, public companies in accordance with the law governing the capital market, regardless of their size, as well as all legal entities or entrepreneurs whose total income generated in the previous business year exceeds 4.400.000 EUR.
However, as the current Rulebook on the content and form of financial reports for companies, cooperatives and entrepreneurs (“Official Gazette of RS”, No. 95/14 and 144/14), or the Rulebook on the content and form of financial reports for other legal persons (“Official Gazette of RS”, No. 95/14), in the Income Statement, do not contain the appropriate AOP which shows the total income, and for the purpose of determining the auditor based on the criteria – total income, we believe that in this case , in order to determine the total revenue in terms of Article 26, paragraph 1 of the Law, the following revenues (AOP positions) from the mentioned regulations should be taken into account:

-Operating income;

-Financial income;

-Income from adjusting the value of other assets at fair value through profit or loss (for companies, cooperatives and entrepreneurs), ie income from adjusting the value of short-term and long-term financial placements and receivables (for other legal entities);

-Other income.

The final decision on tax treatment of transportation costs to employees

Ministry of Finance has published on 1.2.2019 an opinion on documenting the costs of arrival and departure from work for employees. Each company has an obligation to properly document the costs, ie it is necessary to keep a record every month whether travel expenses for employees are covered and that there are documents justifying the costs of transportation.

Furthermore, the Ministry of Finance has issued opinion no. 430-00-648 / 2019-04 dated 17.1.2020 on tax treatment of compensation for costs of arrival and departure from work that have not been documented. Compensation for expenses for arrival and departure from work, to which an employee is entitled in accordance with the general act and the employment contract in accordance with the provisions of Article 118, paragraph 1, item 1) of the Labor Law (not considered as earnings under Article 105, paragraph 3) Of the Labor Law), no compulsory social security contributions are paid regardless of the tax treatment of such benefits under Article 18, paragraph 1, item 1) of the Law.

Finally, 3.6.2020, the Ministry of Finance issued another opinion number 011-00-00040 / 2019-04 which stipulates that the cost of transportation that is not documented by an appropriate credible accounting document is recognized as an expense in the tax balance pursuant to Article 9, paragraph 2 of the Corporate Tax Law.

So, the conclusion is:

  • reimbursement of these expenses that are not documented does not have the treatment of earnings, so that the reimbursement of expenses for arrival and departure from work is taxed at the rate of 10%,
  • At the same time, contributions for compulsory social insurance are not calculated and paid and
  • Transportation costs that are not documented by an appropriate credible accounting document are recognized as an expense in the tax balance.

„Small Business Continuity Checklist“ by IFAC

The unprecedented circumstances of COVID-19 have seen many businesses faced with challenges the likes of which they have never faced before. For many small businesses, having a trusted advisor that they can turn to for help and guidance through this crisis is incredibly important.

Small- and medium-sized practices (SMPs) have a deep knowledge of their clients’ business and many of the specialist skills necessary to help them navigate through these most challenging of times.

A professional accountant can help effectively manage and reduce risk, explain how to take appropriate actions and fortify the business for the medium to long-term.

The Small Business Continuity Checklist is a diagnostic tool to navigate times of disruption, covering two key areas of Financial Management Tasks and Strategic Management Tasks. It is not intended to be an exhaustive checklist of requirements, but rather a tool to help identify priority actions for immediate attention.

Kreston MDM has done an official translation of this document, and the translation has been published on the Kreston MDM website as well as on the IFAC website.