LAW ON ACCOUNTING

I GENERAL PROVISIONS
Article 1
1) Every entrepreneur incorporated in Republic of Croatia is obliged to
conduct accounting records and prepare financial statements
according to accounting principles, so that they provide information
about his operations and position of his assets. Bookkeeping must
be such that provide insight into business events and position of the
company in reasonable time. Business events should be recognized
hen they occur.
!) "n entrepreneur, according to this #a, is legal person that conducts
business ith purpose of earning profit.
$) "n entrepreneur is also a physical person that conducts business
operation ith purpose of earning profit, if some other regulations
prescribe his obligation to pay income ta%.
&) 'rovisions of this #a are valid for those organizational parts of
entrepreneur that conduct business activities abroad if there is no
obligation for them for bookkeeping and financial reporting
according to foreign regulations, as ell as organizational parts of
foreign entrepreneurs conducting business activities in Republic of
Croatia.
() "ccounting for institutions, social organizations, groups of citizens
and other non)profitable legal entities is prescribed by *overnment
of Republic of Croatia on proposal of +inister of ,inance.
II DATA COLLECTING AND PROCESSING AND ACCOUNTING
DOCUMENTATION
Article 2
1) Recording data into accounting records is based on fair and faithful
accounting documentation.
!) "ccounting document is ritten proof about business change, and it
serves as the basis for recording data into accounting records and
supervision over business events.
$) "ccounting document from paragraph -1) of this article is obligatory
for primary entrance of data records through electronic data
processing.
1
Article 3
1) "ccounting document is prepared at place and in time hen
business event occurs, e%cept those documents prepared in
accounting department.
!) Content of accounting document must be such that un.uestionable
and prudently represents business change and to provide all data
necessary for filling the accounts.
$) "ccounting document is prepared in one or several copies -original
and copy or several prints).
&) /elivery of accounting document prepared in one copy is alloed
only if data from that document have been saved and available for
use.
() 0riginal document can be prepared and ritten by electronic
devices, half)automatic devices, typing machine or manually.
1) *ood basis for data recording is accounting document received
through telecommunication devices under the condition that sender
saves and keep the original in proper ay.
2) /ata received through electronic devices can be used as accounting
basis for filling the accounts. Responsible person, ho processed
data, is responsible for prudence and fairness of such data.
3) 'hotocopies of original documents can be used as basis for data
recording under the condition that they have notice about the place
here original document has been saved, the reason for using
photocopy and signature of responsible person.
Article 4
1) "n entrepreneur is responsible for accounting documentation
preparation. #egal representative of an entrepreneur or persons
that authorities have been transfer to ith their signature ensure
prudence and fairness of business change. Electronically prepared
documentation may have facsimile or other recognizable mark of
the persons ho prepared the documentation instead of signature.
Article 5
1) "ccounting documentation must be controlled before
recording.
!) Control is done by persons, authorised for controlling prudence of
each type of accounting document.
$) Controlled accounting document must be such that neutral e%pert
person ho did not take part in business change can,
un.uestionable and ithout any suspicious, make conclusions and
find out about the nature of change.
2
&) Control should fulfil re.uests from "rticle & and ( of this #a.
Article 6
1) "ccounting documentation is stored in original on automatic
processing devices, micrographic processing devices or other
suitable ay. "ccounting documentation is stored for folloing
periods4
'ayroll list or analytical payroll and salary evidences are stored
forever, if they ensure relevant data about employees5
/ocuments that served as basis for recording data are stored
for five years5
'ayment system documents are stored for three years in
authorised financial institutions
6elling blocks and control blocks, aside statements and similar
documents are stored for to years.
III ACCOUNTING RECORDS
Article 7
1) "ccounting records are based on double)entry principles.
!) "ccounting records are4 7ournal, general ledger and subsidiary ledger.
$) 8ournal is business record here accounting changes are recorded in
chronological order. 9t is organized as simple accounting record or as
several records specialized for changes on certain groups of balance
or out of balance entries.
&) *eneral ledger is systematic accounting evidence of changes on
assets, liabilities, capital, e%penses, incomes and business result.
*eneral ledger consists of to autonomous parts4
- Balance 6heet entries
- out of Balance 6heet entries.
() 6ubsidiary ledgers are organized separately.
1) 6ubsidiary ledgers on material assets are presented in .uantities and
amounts.
Article
1) +odel of accounting records depends on techni.ues of entering
business changes.
!) 9f the data are processed manually and half)automated, accounting
records are in form of free lists or bound.
$) 9f electronic computer keeps the accounting records, data are
recorded on available devices.
3
&) Recording data into accounting records is organized and done to
assure4
Controlling re.uests for recorded data
"ccuracy of records and data
:eeping the data
'ossibility of using data
'ossibility of getting insight into items and balance of general
ledger accounts
'ossibility of insight into chronology of recorded business
changes.
Article !
1) "ccounts in general ledger are positioned according to before
prepared chart of accounts. /etails of accounts in chart of accounts
every entrepreneur does according to his needs, taking care that he
must assure positions in Balance 6heet and 9ncome 6tatement
prescribed in this #a.
Article 1"
1# "ccounting records are prepared for business year, hich is e.ual to
calendar year$
!) 0pening accounts is done at each business year according to balance
sheet at the end of the previous period. E%penses and income
accounts are opened according to documentation about business
change.
$) 6ubsidiary ledgers are opened by carrying over the balances
according to balances of same records for previous year, i.e. on the
basis of inventory records on asset and liabilities for ne
entrepreneurs.
Article 11
1) "t the end of business year all accounting records must be closed and
stored.
!) 9f the accounting data have been processed ith electronic
computers, 7ournal and general ledger should be printed according to
closing entries and then bound.
$) "ccounting records are stored for period4
*eneral ledger and 7ournal at least 1; years
6ubsidiary ledgers at least ( years.
&) 'eriod for storing the records starts ith last day of business year.
4
IV INVENTOR% O& ASSETS AND LIA'ILITIES
Article 12
1) "t the beginning of business operation every entrepreneur must make
inventory of his assets and liabilities and set their individual values.
6uch list must be made at the end of each business year.
!) <he entrepreneur can make inventory list during the year, too.
Article 13
1) Besides annual inventory, the entrepreneur must make the inventory
of his assets and liabilities in some other cases, such as henever
prices of goods are changed, in case of statutory changes, opening
li.uidation or bankruptcy procedure.
V 'ASIC &INANCIAL STATEMENTS
Article 14
1) Basic financial statements are4 Balance 6heet, 9ncome 6tatement -or
'rofit and #oss "ccounts), 6tatement of Changes in ,inancial 'osition
and =otes to financial statements.
!) Balance 6heet is systematic revie of assets, capital and obligation at
certain date.
$) 9ncome 6tatement shos revenues and e%penses and financial result
of certain time period.
&) 6tatement of Changes in ,inancial 'osition provides information on
changes in financial position during the accounting period.
() =otes to financial statements provide detailed e%planation and
supplements of data from Balance 6heet, 9ncome 6tatement and
6tatement of Changes in ,inancial 'osition.
1) Basic financial statements must provide true, fair, reliable and neutral
presentation of assets, liabilities, capital -e.uity), changes in financial
position and profit or loss.
2) Basic financial statements are stored forever and in original.
Company>s first Balance 6heet is stored forever and in original.
3) Basic financial statements are prepared for business year.
?) "s the e%emption of paragraph 3 of this "rticle, the entrepreneurs
ith operations ith seasonal characteristics may prepare financial
statements for business year that is different from calendar year.
+inister of ,inance issues decree on that on the entrepreneur>s
re.uest.
5
1;) 6mall entrepreneurs from "rticle 11 of this #a are not obliged to
prepare 6tatement of Changes in ,inancial 'osition.
11) #egally authorised representative of entrepreneur must sign financial
statements.
VI ACCOUNTING STANDARDS
Article 15
1) 9nternational "ccounting 6tandards, published in =ational *azette, are
applied in Republic of Croatia.
!) Croatian Committee for "ccounting and "ccounting 6tandards is
authorised to supervise, ad7ust and interpret application of
9nternational "ccounting 6tandards.
$) Croatian Committee for "ccounting and "ccounting 6tandards is
e%pert body and consists of fifteen members, named by the
*overnment of Republic of Croatia, on the proposal of +inister of
,inance, for period of three years. "fter this period, association on the
basis of +inister of ,inance>s authority, appoints members.
&) Croatian Committee for "ccounting and "ccounting 6tandards sets
Regulation on ork, decision)making and other details, confirmed by
the *overnment of Republic of Croatia.
VII CLASSI&ICATION O& ENTREPRENEURS
Article 16
1) Entrepreneurs that are obliged to conduct accounting records and
prepare financial statements according to this #a are classified into
groups as small, medium large and large entrepreneurs.
!) <o be a small entrepreneur, to of three conditions shouldn>t be met4
a. <he aggregate Balance 6heet after deduction of loss presented
in assets in amount of !.;;;.;;; /+
b. Revenue in 1! months prior Balance 6heet date in amount of
&.;;;.;;; /+
c. "nnual average number of employees ) (;.
$) +edium large entrepreneurs are those entrepreneurs ho fulfil to of
three criteria from paragraph ! of this "rticle, but never fulfil to of
three folloing conditions4
a. <he aggregate Balance 6heet after deduction of loss presented
in assets in amount of 3.;;;.;;; /+
b. Revenue in 1! months prior Balance 6heet date in amount of
11.;;;.;;; /+
c. "nnual average number of employees @ !(;.
6
&) #arge entrepreneurs are those entrepreneurs ho fulfil at least to of
three criteria from paragraph $ of this "rticle.
() Banks, financial organizations, insurance and reinsurance companies
are considered as large entrepreneurs according to this #a.
1) "verage number of employees is calculated as one .uarter of sum of
employees in period from $1
st
+arch to $;
th
8une, and from $;
th

6eptember to $;
th
/ecember, including employees orking abroad.
VIII CONTENT O& &INANCIAL STATEMENTS
Article 17
1) Entrepreneurs, e%cept banks, financial organizations, insurance and
reinsurance companies, prepare Balance 6heet ith folloing item at
least4
ASSETS
". RECEIVA'LES &OR S(ARE(OLDERS E)UIT%* NON+PAID
-or Called up share capital, not paid)
i$ LONG TERM
ASSETS
9 9=<"=*9B#E "66E<6
!. formation costs
$. e%penditures for research and development
&. patents, licences, concessions, trademarks and other
similar rights
(. goodill
1. advances onintangible assets.
99 <"=*9B#E "66E<6
1. land and forests
!. buildings
$. e.uipment and machinery
&. tools, office e.uipment, furniture, transportation
means
(. advances on tangible assets
1. tangible assets ) construction in progress
2. residential buildings and apartments
3. other tangible assets
999 ,9="=C9"# "66E<6
1. shares in subsidiaries
!. loans to subsidiaries
$. participating interests
7
&. investments in other securities
(. given loans, deposits
1. compulsory long)term investments
2. treasury shares
3. other long)term investments
9A RECE9A"B#E6
1. receivables from subsidiaries
!. receivables from sales on credit
$. other long)term receivables
'$ CURRENT ASSETS ,S(OR+TERM ASSETS#
9 9=AE=<0R9E6
1. ra materials and consumables
!. unfinished goods and half)finished goods
$. trade goods
&. finished products
(. advances
99 RECE9A"B#E6
1. receivables from subsidiaries
!. receivables from buyers
$. receivables for prepaid amounts on income
&. receivables from employees
(. receivables from government and other institutions
1. other receivables
999 ,9="=C9"# "66E<6
1. shares in connected companies
!. loans to connected companies
$. securities
&. given loans, deposits
(. treasury shares
1. other short)term investments
9A C"6B "< B"=:6 "=/ 9= B"=/
D PREPA%MENTS AND ACCRUED INCOME
E LOSS A'OVE T(E VALUE O& E)UIT% ,CAPITAL#
& TOTAL ASSETS
G O&& 'ALANCE S(EET ITEMS
8
LIA'ILITIES
A$ CAPITAL AND RESERVES
9 C"##E/ C' C"'9<"#
99 6B"RE 'RE+9C+
999 REA"#C"<90= RE6ERAE6
9A RE6ERAE6
1. compulsory reserves
!. reserves for treasury shares
$. statutory reserves
&. other reserves
A RE<"9=E/ 'R0,9< 0R #066 BR0C*B< ,0RD"R/
A9 'R0,9< 0R #066 ,0R <BE CCRRE=< EE"R
' LONG+TERM PROVISIONS &OR RIS-S AND C(ARGES
1. provisions for retirements and similar e%penditures
!. provisions for ta%es and contributions
$. other provisions
C LONG+TERM LIA'ILITIES
1. liabilities for subsidiaries
!. loans
$. bank loans
&. liabilities for advances
(. accounts payable -liabilities to suppliers)
1. securities payable
2. other long)term liabilities, including ta% and social insurance
D S(ORT+TERM LIA'ILITIES ,CURRENT LIA'ILITIES#
1) liabilities for subsidiaries
!) loans
$) banks loans
&) liabilities for advances, deposits
() accounts payables
1) liabilities for che.ues and bills of e%change
2) liabilities for salaries
3) liabilities for ta%es, contributions and other
?) liabilities for shares in result
1;) other short)term liabilities
9
E ACCRUALS AND DE&ERRED INCOME
& TOTAL LIA'ILITES
G O&& 'ALANCE S(EET ITEMS
!) Balance 6heet positions from paragraph 1 of this "rticle are obligatory
for large and medium large entrepreneurs.
$) 6mall entrepreneurs prepare abbreviated Balance 6heet in such ay
that fulfil those positions marked ith letters and roman numbers.
Article 1
1) 9ncome 6tatement for entrepreneurs from "rticle 12 consists of
folloing items minimally4
I.c/0e St1te0e.t
1. 6ales revenue
!. revenue from using on products, good and services
$. other operational revenues
&. changes in inventories for production and goods
(. operating charges
i. cost of ra materials
ii. costs of goods sold
iii. other e%ternal e%penses -costs of services)
1. E%penses for employees
i. 6alaries and ages
ii. <a%es, social and pension funds e%penses
2. depreciation and revalorisation of long)term assets
3. revalorisation of short)term assets
?. provisions for charges and risks
1;. other operational e%penses
11. a) income from participating interests from subsidiaries
b) income from participating interests from non)related
companies
1!. a) income from other investments and loans from assets
from subsidiaries
b) income from other investments and loans from assets from
other companies
1$. a) income from other investments and similar income
from subsidiaries
b) income from other investments and similar income from
other companies
1&. a) interests, foreign currency e%change gainsFlosses, and
similar costs from transactions ith subsidiaries
10
b) interests, foreign currency e%change gainsFlosses and
similar costs from transactions ith non)related companies
1(. profit or loss from operations, before ta%ation
11. income ta% or loss from operations
12. profit or loss from operations, after ta%ation
13. e%traordinary income
1?. e%traordinary e%penses
!;. profit or loss from e%traordinary activities
!1. other ta%es not reported in above transactions
!!. profit or loss for financial year.
!) 9ncome 6tatement from paragraph 1 of this "rticle are obligatory for
large and medium large entrepreneurs.
$) 6mall entrepreneurs prepare abbreviated 9ncome 6tatement ith
folloing items4
i. revenues from operations -regular activities)
ii. e%penses for operations
iii. revenues from other activities
iv. e%penses for other activities
v. e%traordinary revenues
vi. e%traordinary e%penses
vii. income ta% or loss
viii. profit or loss for financial year.
Article 1!
1) Banks and financial organizations prepare Balance 6heet ith
minimally folloing items4
ASSETS
1. money in cash and on accounts
!. <)bills and similar securities for refinancing at central bank
a) <)bills and similar securities
b) 0ther approved securities for refinancing at central
bank
$. loans and advances to credit institutions4
a) on demand
b) other loans and advances
&. loans and advances to clients
(. securities
a) issued by public entities
b) issued by borroers
c) issued on securities
1. shares and other securities ith variable income
2. investments4
a) in credit institutions
11
b) other investments
3. shares in subsidiaries
a) shares in credit institutions
b) shares in other related companies
?. intangible assets
a) costs of formation
b) goodill
c) other intangible investments
1;. tangible assets
a) land and buildings
b) e.uipment and machinery
c) furniture, transportations and similar
d) residential buildings and apartments
e) other tangible assets
11. called up share capital, not paid
1!. other assets
1$. prepayments and accrued income
1&. total assets
1(. off balance sheet items
LIA'ILITIES
1. payables to credit institutions
a) on demand
b) ith confirmed due dates
!. payables to clients
a) savings deposits
b) other liabilities
$. certified payables
a) notes, bonds and similar
b) other securities
&. other payables
(. accruals and deferred income
1. provisions -reserves) for risks and charges
a) provisions for retirements and similar costs
b) provisions for ta%es and contributions
c) other provisions
2. second line liabilities
3. shareholders e.uity
a) paid capital
b) called up capital
?. share premiums -capital gains)
1;. reserves
11. revaluation reserves
1!. profit brought forard or loss
1$. profit or loss for the year
1&. total liabilities
12
1(. off balance sheet items
a) une%pected liabilities -contingencies)
) accepts and approvals
) guaranties and collateral
b) liabilities
) from transactional sale
) repurchase agreements.
Article 2"
1) 9ncome 6tatement for banks and financial organizations consists of
folloing items4
1. interest income and similar revenues
!. income e%penses and similar e%penses
$. revenue from securities
a) revenue from shares and other securities ith variable income
b) revenue from participating interests
c) revenue from shares in subsidiaries
&. fee income
(. fee e%penses
1. net profit or loss from financial operations
2. other revenues
3. general administrative e%penses
a) e%penses for employees
- salaries and ages
- ta%es, social insurance and similar
b) other administrative e%penses
?. depreciation
1;. other e%penses
11. revaluation of loans and advances and provisions for
contingencies and other obligations
1!. repeatable revaluation of loans and advances and provisions
for contingencies and other obligations
1$. revaluation for transferable securities as long term financial
assets, participating interests and shares in related companies
1&. repeatable revaluation for transferable securities as long term
financial assets, participating interests and shares in related
companies
1(. profit or loss from ordinary activities
11. income ta% or loss from ordinary activities
12. profit or loss after ta%ation
13. e%traordinary revenues
1?. e%traordinary e%penses
!;. profit or loss from e%traordinary activities
!1. ta% on e%traordinary profit or loss
13
!!. e%traordinary profit or loss after ta%ation
!$. other ta%es not reported above
!&. profit or loss for current year
Article 21
1) 9nsurance and reinsurance companies prepare Balance 6heet ith
folloing items, minimally4
ASSETS
A$ CALLED UP CAPITAL* NOT PAID
'$ INTANGI'LE ASSETS
1. costs of formation
!. goodill
$. other intangible e%penditures
C INVESTMENTS
9 #"=/ "=/ BC9#/9=*6
99 9=AE6<+E=< 9= RE#"<E/ C0+'"=9E6 "=/ '"R<9C9'"<9=*
9=<ERE6<6
1. shares in subsidiaries
!. debt securities issued by related companies and loans to
subsidiaries
$. participating interests
999 0<BER ,9="=C9"# 9=AE6<+E=<6
1. shares and other securities ith variable income
!. debt securities
$. participation in 7oint ventures
&. secured loans
(. other loans
1. deposits ith credit institutions
9A /E'069<6 ,R0+ 9=6CR"=CE <":E= 0AER "6 RE9=6CR"=CE
D INVESTMENST IN T(E NAME AND &OR T(E ACCOUNT O&
OWNER O&
LI&E INSURANCE POLIC%
E RECEIVA'LES
14
9 RECE9A"B#E6 ,R0+ 0D= 9=6CR"=CE "C<9A9<9E6
1. from insured
!. from agents @ intermediates for insurance
$. from others
99 RECE9A"B#E6 ,R0+ RE9=6CR"=CE "C<9A9<9E6
999 0<BER /EB<0R6 @ 0<BER RECE9A"B#E6
& OT(ER ASSETS
9 C"6B "< B"=: "=/ 9= B"=/
99 <RE"6CRE 6B"RE6
G PREPA%MENTS AND ACCRUED INCOME
1. interests and not due lease
!. deferred costs @
a. life insurance
b. non)life insurance -household insurance)
$. other deferred costs
( TOTAL ASSETS
1. 0,, B"#"=CE 6BEE< 9<E+6
LIA'ILITIES
A$ CAPITAL AND RESERVATION 2 OWN CAPITAL
9 C"'9<"#
a. 'aid capital
b. Called up capital, not paid
99 'RE+9C+ ,0R 966CE/ 6B"RE6
999 REA"#C"<90= RE6ERAE6
9A RE6ERA"<90=6
A 'R0,9< 0R #066 BR0C*B< ,0RD"R/
A9 'R0,9< 0R #066 ,0R 'ER90/
' SECOND LINE O'LIGATION ,LIA'ILITIES#
15
C TEC(NICAL RESERVATIONS
1. transferable premiums
a. gross amount
b. portion for insurance transferred into reinsurance
!. mathematical life insurance provisions
a. gross amount
b. portion for insurance transferred into reinsurance
$. reservation for claims
a. gross amount
b. portion of reinsurance
&. reservation for premium recovery dependent and independent on
result
a. gross amount
b. portion of reinsurance
(. legally prescribed reservation for uncertainty of damage
1. other insurance)technical reservations
a) gross amount
b) portion of reinsurance
D NON+INSURANCE TEC(NICAL RESERVATIONS
1. reservations for pensions and other
!. reservations for ta%ation
$. other reservations
E (OLD DEPOSITS &ROM OPERATIONS TRANS&ERRED INTO
REINSURANCE
& OT(ER O'LIGATIONS
a) to subsidiaries
b) to companies ith participating interests
1. loans
!. liabilities to credit institutions
$. liabilities from independently concluded insurance
&. liabilities from reinsurance
(. other creditors, including ta% and social insurance
G ACCRUALS AND DE&ERRED INCOME
( TOTAL LIA'ILITIES
9 0,, B"#"=CE 6BEE< 9<E+6
16
Article 22
1) 9ncome 6tatement for insurance and reinsurance companies consists
of folloing items minimally4
1. <ECB=9C"# "CC0C=< @ =0= #9,E 9=6CR"=CE "C<9A9<9E6
1. 'remium
i. gross premium @ calculated
ii. minus @ amounts given into reinsurance
iii. changes in unearned premium, and if national legislation
allos e%pected losses reservation
iv. earned premium
!. 0ther technical income, net ithout reinsurance
$. 9ncome investments -G) 9993 @ <echnical revenues from
interests
&. e%penditures for claims
i. claims settled @ for insured cases
i. gross amount
ii. reinsurance -))
iii. net amount
ii changes in reservation for on account
1. ithout reinsurance
!. F-G) or -))F
iii e%penditures for on accounts
(. changes in other insurable) technical reservations, for on
account @
ithout reinsurance4
) changes in reservation for possible losses @ for current
risks
) changes in other insurable)technical reservation
1. e%penditures for premium recovery for on account @
ithout reinsurance
i. independently from result
ii. dependently from result
2. operating e%penditures @ e%penditures for operation
i. costs of agent selling @ fees
ii. administrative costs
iii. reinsurance fees and shares in profit
iv. changes in deferred costs of agent selling
v. operation costs, net of reinsurance. E%penditures for
operation @ for on accounts
3. other insurable)technical e%penditures for on accounts @
ithout reinsurance.
?. subtotal -first technical result)
17
1;.changes in reservation and reserves for uncertainty of
damage
i. changes in compulsory or statutory prescribed
provisions
ii. changes in other provisions and reserves
11.subtotal -second technical result) -999 1)
99 9=6CR"B#E)<ECB=9C"# "CC0C=< @ #9,E 9=6CR"=CE
1. premium4
i. gross premium @ calculated
ii. minus @ amounts given into reinsurance
iii. changes in premium
iv. earned premium
!. income from investments
income from participating interests
income from investments in land and buildings, increase in value
and profit from sale -capital gain realisation)
$.unearned gains from investments
&. other insurable)technical revenues
(. subtotal4 total insurable)technical revenues
1. E%penditures for claims
1. e%penditures for insurance @ claims -gross
amount, reinsurance, net amount)
!. changes in provisioning for claims for on
accounts
$. e%penditures for claims for on accounts
2. changes in insurable)technical provisions for on accounts, if not
shon at 1.c or 1.b
1. mathematical life insurance reservation for
on account
!. other insurable)technical reservation for on
account
3. e%penditures for premium recovery for on account
1. dependently on result
!. independently on result
?. operation e%penditures
1. costs of agents @ fee
!. administrative costs
$. reinsurance provisions and shares in profit
&. changes in deferred costs of agents
(. business e%penditures, net reinsurance or
e%penditures for operations @ for on
accounts
1;. e%penditures for capital investments
1. costs, including interests, for land and
buildings
18
!. other costs for investment management,
including interests
$. ad7ustments
&. losses hen selling @ capital investment
realisation
11. unrealised losses on investments
1!. other insurable)technical e%penditures
1$. income from investment transferred to non)technical account -999.()
-))
1&. subtotal4 technical result -999.)!)
999 =0=)<ECB=9C"# "CC0C=< @ <0<"# C"#CC#"<90=
1. <echnical calculation result @ non)life insurance -9.11)
!. <echnical calculation result @ life insurance 399.1&)
$. income from investments4
a. income from participating interests, in related companies
b. income from other investment, in related companies
i. income from land and buildings
ii. income from other investments
iii. income from increased value
iv. sales income
&. unrealised gains from investment
(. distributed interests @ from investment, from 99.1$ -G)
1. e%penditures for investments
a. costs, including interests, for land and buildings
b. other costs for management, including interests
c. ad7ustment
d. losses from sales
2. unrealised losses on investments
3. distributed income from investment -9.$), revenues from interests
?. other income
1;. other e%penditures, including ad7ustments
11. ta% on result from ordinary activities
1!. result from operating activities, after ta%ation
1$. e%traordinary income
1&. e%traordinary e%penditures
1(. financial result from e%traordinary income and e%penditure
11. ta% on financial result from e%traordinary income and e%penditure
12. other ta%es not presented in above positions
13. result for financial year.
Article 23
19
1) "n Entrepreneur ith statutory changes -connection, take)over,
ac.uisition) prepares financial statements at date preceding the date
of statutory change.
!) ,inancial reports are prepared hen opening bankruptcy and
li.uidation procedure.
Article 24
1) Entrepreneurs, legal entities that are parents of subsidiaries prepare
consolidated financial reports of a group as those of a single
enterprise.
!) Consolidation is done because of presentation financial information
about assets, liabilities, e.uity, e%penses, income and financial results
for all participants are as that of a single entity.
$) " subsidiary is legal entity that is controlled by other legal person @
parent company.
&) " parent is an enterprise that has one or more subsidiaries.
() " group is a parent and all its subsidiaries.
Article 25
1) 'rinciples for consolidation financial statements are4
Economic integrity
Continuity in consolidation methods
Cni.ue time of consolidation
Cni.ue measurement.
I3 MEASUREMENT PRINCIPLES
Article 26
1) Basic accounting prere.uisites for preparing financial reports are4
a. *oing concern
b. Consistency
c. "ccrual basis of accounting
!) Dhen preparing financial reports basic principles of measurement
-Balance 6heet items and 9ncome 6tatement items) should be
applied4
a. prudence
b. substance over form
c. materiality
d. single items measurement
e. time connection of balance sheet items.
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3 ANNUAL REPORT
Article 27
1) #arge entrepreneurs from "rticle 11 of this #a prepare annual report
hich, besides financial reports, must provide folloing information4
1. about all relevant business events during the year
!. reliable and predictable revie of business operation
$. activities in area of research and development
&. information about ac.uisition of treasury shares.
!) #egal representative of the entrepreneur presents annual report.
3I AUDIT O& &INANCIAL STATEMENST
Article 2
1. 0nce a year financial reports of all large entrepreneurs and medium
large entrepreneurs, if they are organized as 7oint stock companies,
must be audited.
!. 6mall entrepreneurs organized as 7oint stock companies are obliged
for shortened audit every third year. 6hort audit is revie into
operations.
$. 0ther medium large and small entrepreneurs are obliged to audit
financial reports according to on regulation or 6tatute.
3II &INANCIAL STATEMENTS DISCLOSURE
Article 2!
1) "ll large and medium large entrepreneurs organized as 7oint stock
companies are obliged to publicly disclose financial statements.
!) ,inancial statements are disclosed according to content of Balance
6heet and 9ncome 6tatement prescribed for small entrepreneurs.
$) "uditor>s opinion is published together ith financial statements.
3III &INANCIAL STATEMENTS AND ANNUAL REPORTS
PRESENTATION
Article 3"
1) #egal representatives of entrepreneurs are obliged to present financial
statements and annual report to their oners in folloing periods4
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a. 9n period of si% months after business year @ large
entrepreneurs
b. 9n period of four months after business year @ medium and
small entrepreneurs
c. 9n period of nine months after business year @ a group that
prepares consolidated financial statements.
!) #egal representatives of entrepreneurs are obliged to deliver financial
statements to court register immediately after presentation to oners,
but not later than nine months after business year.
$) ,inancial statements are delivered in abbreviated form, as prescribed
for small entrepreneurs.
3IV LANGUAGE AND CURRENC%
Article 31
1) "ccounting records and financial statements are prepared in Croatian
language and presented in Croatian currency.
3V PENAL PROVISIONS ,MEASURES#

Article 32
1) #egal representative of entrepreneur in hose financial statements
position of assets, e.uity and liabilities ere presented unfaithfully
ith intention to mislead and get some personal gain or produce
damage to somebody ould be punished ith 1; million Croatian
dinars or prison lasting up to three years.
Article 33
1) #egal representative of entrepreneur in hose financial statements
business events ere based on unreliable documentation -contrary
"rticle $) ould be punished in amount of (;H of the amounts
presented in that unreliable documentation.
Article 34
1) #egal representative of entrepreneur ho does not make inventory of
assets and liabilities and does not present true amounts in accounting

According to Article 5 of the Decree on getting out of force the Decree on introduction Croatian dinar as legal
currenc on territor of !e"u#lic of Croatia$ and on %ethod and ti%e of calculation a%ounts in dinar into &una
and li"a '(ational )a**ette 37+94,$ a%ounts of "unish%ents "resented in Croatian dinar in all regulations$ so as
-ell in .a- on Accounting$ are considered to #e "resented in &unas$ #ut figures in Croatian dinars are di/ided #
10000
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records -"rticle 1! and 1$) ould be punished in amount of !;H of
value of those assets and liabilities that have not been inventoried and
ad7usted in records.
Article 35
1) #egal representative of entrepreneur ould be punished ith amounts
from (;;.;;; to 1; million Croatian dinars if4
a. /oes not conduct accounting records -"rticle 2)
b. /oes not store accounting records -"rticle 11)
c. /oes not prepare basic financial statements -"rticle 1& to !()
d. /oes not follo principles and methodologies of measurement
-"rticle !1)
e. /oes not prepare annual report -"rticle !2).
Article 36
1) #egal representative of entrepreneur ho does not disclose -publish)
or present financial statement -"rticle !? and $;) ould be punished
ith amounts from (;;.;;; to 1; million Croatian dinars.
3VI TRANSITIONAL PROVISIONS
Article 37
1) Entrepreneurs from "rticle 1 of this #a may prepare starting
-opening) Balance 6heet at ;1
st
of 8anuary 1??$, according to
provisions from "rticle 1; paragraph ! and "rticle 1! of this #a that
is obligatory for nely established entrepreneurs.
Article 3
Coming into force this #a, #a on "ccounting -=ational *azette ($F?1
and $$F?!) is getting out of force, e%cept for institutions, social
organisations, groups of citizens and other non)profitable legal entities, for
hom that #a ould be in force until legislation from "rticle 1 paragraph
( of this #a ould be approved.
Article 3!
<his #a comes in force ith day of publishing into =ational *azette, and
its application starts on 1
st
of 8anuary 1??$.
Class4 &;1);1F?!);1F;1
Iagreb, !$
rd
/ecember 1??!.
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