Analysis of Development of the Accounting and Reporting for Small and Medium Enterprises[Analýza vývoje účetnictví a výkaznictví malých a středních podniků]

Small and medium enterprises play a very important role in economy of European Union. Cross-border activities of SMEs are limited by many obstacles. The biggest obstacle is existence of 27 different systems of accounting within the European Union, which have to be harmonized. The International Accounting Standards Board (IASB) issued the International Financial Reporting Standard (IFRS) on 9 July 2009, designed for Small and Medium Enterprises (SMEs), which came into force immediately. The Board hopes that application of the standard will improve comparability of financial reports and will improve confidence in financial reports of small and medium enterprises. Specific problem for the Czech Republic is that the national legislation does not allow it to specify the income tax base from the statements prepared according to IAS/IFRS standards and thus the companies have to prepare the statements according to Czech legislation in parallel, which represents a tremendous administrative burden. The aim of the article is to analyse of the development of accounting and reporting in SMEs and to compare with the accounting practice in companies which report according to international financial reporting standards.