From the 01.01.2015 the provisions of the Law 4308 / 11.24.14 (Governments Gazette 251) will apply, in which the new Greek Bookkeeping Principles have been voted.
With this Law, all existing provisions have been repealed, without any adjustment period.
The financial statements which have been prepared according to the new Law, are similar to the current ones in Central Europe and take into account the International Financial Reporting Standards as adopted by the European Union under Regulation 1606/2002.
Today we will inform you of the details of the profit and loss account (Article 25 of the Law).
The voting / adoption of this article brings a revolution to the dates which were valid so far, because as expenditure / expense, among others, also provisions for other risks and costs, expenses and losses that arise from rating / evaluating assets and liabilities and the income tax of the period the current and the deferred depending to the case, are acceptable.
Basically the issuance of “commercial” financial statements of almost all the companies operating in our country is required and not the ‘ tax one’ as it was the case since today. Specifically:
– Revenues are recognized in the period in which they are earned.
– The income from sale of goods is recognized when all of the following criteria are met:
a) the significant risks and rewards associated with their ownership are transferred to the buyer,
b) the goods are accepted by the buyer, and
c) the economic benefits of the transaction can be reliably measured and the inflow in the entity is highly possible
– The income from services and construction contracts are recognized according to the percentage of completion (the percentage completion method) and in case the inflow of economic benefits of the transaction is considered highly possible. Alternatively, the process of the integrated contract may be used if the sizes / values of the financial statements are not essentially affected.
– The revenue from the use of assets of the entity by third parties are recognized as follows:
a) The interest on a time proportion with the effective interest method or the straight-line method.
b) The dividends or similar income from the participation in other companies, when approved by the competent body which decides on their distribution.
c) The rights under the relevant contract terms.
– The above mentioned revenues are measured in net amounts, free of any refund, discount or sales tax and are recognized separately from the related costs.
– The costs include:
a) Establishment expenses
b) The acquisition cost or productioncosts, where applicable, of the sold goods or services
c) Any kind of employee’s payroll expenses, including provisions for future benefits
d) Research Costs
e) Development costs
f) Repairs and maintenance
g) Depreciation of tangible and intangible fixed assets
h) The provisions for other risks and charge
i) Interest and similar expenses
j) Expenses and losses arising from measuring assets and liabilities in accordance to this Law
k) Losses arising on derecognition of assets
l) Other resulting damages which appear in their net amount
m) The income tax for the period current and deferred as appropriate according to the case
n) Any other expense that occurs and is not included in the previous categories
In any case, we are expecting detailed instructions from the Ministry of Finance for further clarification on application and implementation of the provisions of this Law.