Consolidation package and the new Accounting Act
At the end of November 2023, President signed the consolidation package, which amends a total of 65 laws, including the Accounting Act. The partial amendment to the Accounting Act includes the possibility of using a functional currency in Czech accounting, which we reported in the newsletter last month and which comes into force on 1 January 2024.
The new Accounting Act should come into force one year later, on 1 January 2025. An accompanying Act is currently being drafted and a new decree should be prepared by mid-2024. The legislative process for the new Accounting Act is expected to start in early
Sustainability reporting in the consolidation package
As part of the consolidation package, the European Corporate Sustainability Reporting Directive (CSRD) is transposed into the Czech legal system, bringing a new obligation to prepare a sustainability report into the Accounting Act. The new obligation will fall on companies gradually, in several stages. The first stage (in 2025) will cover PIE companies as well as large companies with more than 500 employees, where both conditions have to be fulfilled at the same time.
The purpose of the sustainability report should be to provide transparent information needed to understand the entity's sustainability impacts and to understand the impact of sustainability on the entity's development, performance and financial position. The CSRD's intention is to encourage change in business conduct and will therefore require companies to provide a new level of disclosure.