Reform of Slovak Accounting

A change of the economic and the political conditions in Middle and Eastern Europe after 1989 initiated a change in the economy from central planning to a market economy. The state was not the single owner of businesses anymore and private owners and entrepreneurs became a part of the economy. The reconstruction of the economic mechanism was inspired by former soviet perestrojka. It was necessary to privatize the national sector and secure a private free trade economy.

This transformation also required a change in the character and a role for the accounting system in Slovakia. These facts became a part of a new accounting system that was based on the Act no.563/1991 on Accounting, effective January 1,1993. This Act has been amended five times since. The goal of these revisions was to harmonize the basic accounting system with that of the European Union, specifically its fourth, seventh, and eighth Directives. The basic juridical norms concerning accounting are:1

• Commercial Code — states the obligation for entrepreneurs to keep books, to generate accounting reports and in certain instances to certify the correctness of the accounting report by an auditor.

• Act on Accounting — as a general juridical norm

• Decrees of the Ministry of Finance of the Slovak Republic — define the accounting methods and procedures within a single-entry bookkeeping, as well as within double-entry bookkeeping system. Decrees also classify a form, a structure, and a content of individual and consolidated accounting reports for different types of entrepreneurial and non-entrepreneurial units.