IFRS Services

In today’s rapidly changing economic, legal and tax environment, accountants are finding an increasing number of complex accounting issues under either (or both) the Hungarian Accounting Act or IFRS (International Financial Reporting Standards) that require extensive expertise.

Have you faced any of the following questions?

• How to account for the acquisition of new portfolios or business lines?
• Is it possible to maintain the company’s books in the currency determined by the group?
• How to account for leasing arrangements (in the case of finance and/or operating leases)?
• Is it possible to include leases in non-lease agreements?
• When and how to account for financial support provided/received?
• When is it necessary to recognise a provision and in which cases is it optional to record a provision?
• How to treat a transformation from an accounting perspective? How will a transformation affect the financial statements?
• How to account for discounts under the Hungarian Accounting Act and under IFRS? What impact could it have on revenues?

We can assist you with the following:

• Establish the accounting policy most suited for the company based on its activities, review or update the company’s existing accounting policy;
• Consultation on the accounting of complex transactions based on industry practice;
• Accounting support including verbal discussion of accounting issues, which provides an opportunity to clarify issues in a flexible manner;
• Present possible accounting treatments of specific transactions in a written advisory letter.

Please contact Miklós Novák, senior manager, for further information on our services.

In many cases, accounting records need modification due to errors arising from the accounting for income tax, which often causes material errors in financial statements. The changing global operational environment and recent amendments to the Hungarian taxation regulations have resulted in an increased need to verify the increasingly complex calculation of deferred tax balances.

What sort of questions might arise when calculating deferred tax?

• How is deferred tax calculated using the balance sheet method?
• What sort of practical problems might we face when calculating deferred tax for the first time?
• Which tax rate should be applied when calculating deferred tax?
• How do you verify that all items have been taken into consideration?
• When is it possible to recognise deductible temporary difference and/or loss carry-forward as a deferred tax asset?
• How is the effective tax rate calculated?

We can assist you with the following:

• Reviewing tax balances
• Identifying temporary differences
• Reviewing the method used for the calculation of deferred tax
• Consulting on specific questions related to deferred tax
• Providing IT support for the calculation of deferred tax
• Calculating deferred tax and discussing practical issues in a workshop

Please contact Roland Balogh, manager for further information on our services.

Applying newly issued International Financial Reporting Standards may result in substantial changes from existing accounting practices.

The adoption of IFRS 15 ‘Revenue from contracts with customers’ issued on 28 May 2014, IFRS 9 ‘Financial instruments’ issued on 24 July 2014 and IFRS 16 ‘Leases’ issued on 13 January 2016,  may place a significant burden on preparers of IFRS financial statements.

The implementation of new standards represents a real challenge not only for finance teams but also impacts many areas across organisations.

Have you considered any of the following questions?

• Which new standards do I need to implement?
• How will the new standard(s) affect existing bookkeeping and accounting processes?
• Do I need to adjust the sub-ledgers to comply with the new accounting requirements?
• Do the current accounting and ERP systems require development?
• How will the new standard affect the company’s key performance indicators?
• How will the new standard affect the company’s business activities?

We can assist you with the following:

• Conducting an impact assessment, based on the company’s transactions, of how the accounting treatment is expected to change;
• Consulting on how to account for significant transactions based on industry practice;
• Assessing the company’s planned transactions, identifying the most relevant circumstances that determine the accounting treatment, and assisting the company by providing an impact assessment of any changes in these circumstances;
• Assisting in the analysis of data generated by ERP systems and implementing solutions that comply with the new standards.

Please contact Gergely Németh, manager for further information on our services.

Implementation of International Financial Reporting Standards (IFRS) may result in significant changes in accounting processes and an increased number of assets that need to be valuated on an annual basis.

IFRS may also modify the accounting treatment for acquisitions - all (tangible and intangible) assets obtained by means of an acquisition or combination must be recognised at their current market value (valid at the date of acquisition) in the acquirer’s balance sheet, and amortised according to their useful lives. Any goodwill arising from the acquisition must be tested for impairment annually.

Many financial assets and instruments, insurance contracts and share options, among others assets and liabilities must also be valued under IFRS. Please note that share options represent adjusting items in the profit and loss statement. 

The valuation of these assets and liabilities is often complex, requiring special valuation and technical skills to understand and interpret the specific accounting consequences of the valuation in light of a broader business environment.

PwC’s valuation experts have extensive experience in technical and financial consulting and provide complex advisory services in co-operation with our accounting experts.

Please contact Eszter Sager, senior manager, for further information on our services.

In today's highly digitized world, full or partial IT support is indispensable in many areas. IT solutions are also required for rapid, accurate and efficient execution of accounting tasks and financial statement preparation.

What challenges might you face as an accounting professional?

1. Are you required to prepare financial statements or internal reports for several companies almost at the same time, and within a short deadline?
2. Are you required to prepare internal reports on a monthly or quarterly basis?
3. Is the preparation of financial statements and reports time-consuming?
4. Do financial statements or reports need to be prepared manually?
5. Do you need to prepare separate and consolidated financial statements for a group with a large number of companies?
6. Does the group lack a single consolidation system?
7. Is corporate income tax calculated and declared manually?
8. Is deferred tax calculated manually?

We can assist you with the following:

PwC has developed specific IT tools for address many of the above accounting issues:

MyReporting IT tool:

• automatically generates financial statements or other reports
• suitable for use in any accounting framework
• enables rapid, accurate and efficient preparation of financial statements
• requires no IT development
• easy to install and deploy
• easy to use and learn
• provides a comparison of Excel spreadsheets

eConsolidation IT tool:

• automates the most frequent and most time-consuming consolidation tasks, such as
  • adding or deleting subsidiaries,
  • summarising data,
  • translating foreign-currency items of foreign subsidiaries,
  • reconciling intra-group transactions,
  • handling modifications
• provides a comparison of Excel spreadsheets
• suitable for combining with MyReporting, speeding up preparation of consolidated financial statements
• provides a structured and uniform consolidation package sample
• requires no IT development
• easy to install and deploy

Please contact Péter Heronyányi, manager, for further information on our services.