If the foreign parent entity of the Hungarian subsidiary, in line with the changing Hungarian juristical, is expected to ask the subsidiary to move from the local GAAP to IFRS (International Financial Reporting Standards) or the Hungarian legal environment itself will require the IFRS transition, we strongly recommend our clients to ask for a detailed written prospectus from the representative of our company, in which document our company summarizes the currently available juristical conceptions and offers a practical professional suggestion to treat the new situation effectively.
We find it so important to underline that the transition to IFRS accounting and reporting will require an extremely high level of intellectual capacity during the first time IFRS adoption, the new approach will have an effect on not only one but more periods at the same time. So both from cost and professional quality perspective, we find the permanent preparation for the transition a much more efficient way than just facing unprepared with the IFRS Financial Statement preparation deadline defined by the Hungarian law(s) or by the parent entity.
Derived from the present Hungarian legal conception, if an entity in Hungary adopts IFRS, it will be not allowed for at least 5 years to return to the application of accounting standards that were in use prior to IFRS. Based on that and on other factors, a properly detailed English language professional documentation will be a crucial point during the first time adoption of IFRS. Furthermore, after the adoption, only a registered IFRS Chartered Accountant or equivalent professional will be authorized to prepare the Financial Statement of the entity.

Leave a Reply

Your email address will not be published. Required fields are marked *