Comparison of Valuation of Financial Instruments according to the International and Czech Accounting Standards in the Context of Performance Reporting

instruments according to the international and Czech accounting standards in the
context of performance reporting of trade corporations. Differences in valuation and
reporting of financial instruments are examined in connection with the upcoming
amendments to the international accounting standards, which are currently the
subject of scientific and expert discussions. The research focused on the comparison
of classification methods of financial instruments according to the international and
Czech standards and the resultant methods of recognition, valuation and reporting
with the aim of identifying possible differences. The research arrived at the discovery
of what causes the differences and the assessment of their impact on the financial
statements of trade corporations. A different concept of accruals on long-term
receivables and variant calculations of present value affected the amount of the
reported balance sheet as well as performance. Calculations of specific values of
differences in financial instruments are made in two model examples in the categories
Held-to-maturity investments (HTMI) and Loans and receivables (L&R), both from the
viewpoint of owners, as well as from the perspective of debtors. The development of
these differences in time is described graphically. The differences in the reported
values manifested themselves in overvaluation or undervaluation during the life of
the financial instrument, but the values were identical at the time of their maturity. It
has been proved that differences between the reported financial situation and the
performance of trade corporations persist even after the amendment to the Czech
accounting legislation, and it is necessary to take them into account in financial
analysis.