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New Czech Accounting Act: current status, effective date and mandatory IFRS

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In brief

The new Czech Accounting Act has not yet been passed. As of 21 October 2026, the government bill (parliamentary print 63) is scheduled for its second reading at the 34th session of the Chamber of Deputies; after the Chamber, it still has to go to the Senate and the President of the Republic. The bill provides for an effective date of 1 January 2028 (§ 286); for accounting periods beginning before that date, the current Act No. 563/1991 Coll. applies (§ 278). It extends mandatory IFRS for individual financial statements from issuers of investment securities admitted to trading on a European regulated market to banks, insurers, investment funds and other financial institutions (§ 168(1)), according to the explanatory report to roughly 1,100 to 1,300 accounting entities.

Status as of 21 October 2026
second reading in the Chamber of Deputies
Effective date in the bill
1 January 2028 (§ 286)
IFRS required
banks, insurers, funds and others (§ 168)
Entities affected
roughly 1,100 to 1,300

On this page

This is an English translation of the Czech guide Nový zákon o účetnictví. Quotations from Czech sources are our translation; IFRS 1 is quoted from its official English text.

Status of the parliamentary process

Status as of 21 October 2026

  • The second reading is item 5 of the approved agenda of the 34th session of the Chamber of Deputies, which began on 13 October 2026. As of 21 October 2026, the second reading had not been completed.
  • The bill has therefore not yet passed the third reading, the Senate or the President of the Republic.
DateStep
12 December 2025The government submitted to the Chamber the bill on accounting (print 63) and the related bill amending certain acts and repealing Act No. 25/2017 Coll. (print 64).
12 March 2026First reading at the 10th session; the bill was referred to committees, with the Budget Committee as the lead committee; time limit for consideration 120 days.
29 April 2026The Budget Committee adjourned its consideration “until the committee’s meeting in September 2026” and set a deadline for written amendments of 28 August 2026 (resolution No. 85, print 63/1).
13 October 2026The 34th session opened; the second reading of print 63 is item 5, of print 64 item 6.

When it will take effect

Under § 286 of the bill, the Act takes effect on 1 January 2028. There are two exceptions: § 271 (special procedures for confidentiality) takes effect on the day after its promulgation, and § 253 (publication in the European single access point) on 10 January 2028. The new Act repeals the current Act No. 563/1991 Coll. (§ 285 point 1).

“For accounting periods beginning before the date on which this Act takes effect, Act No. 563/1991 Coll. and the legal regulations implementing it shall apply, as in force before the date on which this Act takes effect.” (§ 278) With an accounting period equal to the calendar year, the new Act would therefore first apply to the year 2028; with a financial year starting, for example, on 1 April, to the period from 1 April 2028.

Until the Act is passed, the proposed effective date may still change during the process in the Chamber or the Senate.

Who will have to use IFRS (§ 168(1))

Today, IFRS must be used for individual financial statements only by commercial companies that are issuers of investment securities admitted to trading on a European regulated market (§ 19a(1) of Act No. 563/1991 Coll.; details in the guide IAS 19 in the Czech Republic). Under the bill, international accounting standards will be used for individual financial reporting by an accounting entity that is:

  • a bank or a credit union (letters (a) and (b)),
  • a payment institution or an electronic money institution (letter (c)),
  • a domestic insurer, a domestic reinsurer or an institution whose activity is export credit insurance on behalf of the state, with a state guarantee or with the state as the insurer, or an insurance holding company (letters (d) and (e)),
  • a pension company or a fund managed by a pension company (letters (f) and (g)),
  • an investment fund, a sub-fund of an investment fund or an investment company (letters (h) to (j)),
  • a securities dealer or a systemically important dealer (letters (k) and (l)),
  • a provider of group financing services or an investment holding company under directly applicable EU regulations, a mixed holding company or a financial holding company under the Banking Act (letters (m) to (p)),
  • a business corporation that is an issuer of investment securities admitted to trading on a European regulated market (letter (q)).

According to the explanatory report, this concerns roughly 1,100 to 1,300 accounting entities, more than ten times the current number. Banks and other financial institutions covered by Decree No. 501/2002 Coll. today follow IFRS for the presentation and measurement of financial instruments and the related disclosures in the notes; under the bill they are to use IFRS “in their full scope”. No counterpart of Decree No. 501/2002 Coll. or of Decree No. 502/2002 Coll. (insurers) will be issued.

Accounting entities not listed in § 168 cannot use IFRS for individual financial reporting and follow the Act and its implementing decree (explanatory report on § 168).

A parent entity that is required to use IFRS for its individual financial statements also uses them for consolidated financial reporting (§ 170(1)). Other parent entities may use them for consolidation (§ 170(2)).

Who may use IFRS voluntarily (§ 168(2))

International accounting standards may be used for individual financial reporting by an accounting entity that:

  • is a taxpayer whose income tax is administered by the Specialised Tax Office (letter (a)). This is a change from the current rules. According to the explanatory report, it concerns legal entities established for business that have reached a turnover of more than CZK 2 billion, and members of a group under the VAT Act if the income tax of one of the group members is administered by the Specialised Tax Office. In recent years that office has administered roughly 2,400 entities, about half of them financial institutions.
  • reasonably expects to be included in the accounting period in consolidated financial statements prepared under IFRS (letter (b)); this corresponds to today’s § 19a(7) and (8),
  • is a jointly controlled entity and the interest in it will be measured using the equity method in consolidated financial statements under IFRS (letter (c)),
  • used IFRS, mandatorily or voluntarily, in the immediately preceding individual accounting period (letter (d)).

An accounting entity may stop using them at the earliest in the third individual accounting period after the period in which it first used them (§ 169(3)).

What it means for employee benefits

Under the bill, international accounting standards are the standards adopted by Commission Regulation (EU) 2023/1803 (§ 2(3)); they include IAS 19 Employee Benefits. An accounting entity that moves to IFRS therefore measures retirement bonuses and jubilee bonuses agreed in a collective agreement or an internal rule under IAS 19, using the projected unit credit method. The procedure is described in the guide IAS 19 in the Czech Republic.

First financial statements under IFRS

An entity using IFRS for the first time follows IFRS 1 First-time Adoption of International Financial Reporting Standards:

  • It prepares and presents an opening IFRS statement of financial position at the date of transition to IFRSs (paragraph 6). With the exceptions in paragraphs 13 to 19 and Appendices B to E, it recognises in it all assets and liabilities whose recognition is required by IFRSs and measures them under IFRSs (paragraph 10).
  • The first IFRS financial statements must include at least three statements of financial position and comparative information (paragraph 21). The date of transition to IFRSs is “the beginning of the earliest period for which an entity presents full comparative information under IFRSs in its first IFRS financial statements” (Appendix A).
  • If a subsidiary becomes a first-time adopter later than its parent, it measures its assets and liabilities either at “the carrying amounts that would be included in the parent’s consolidated financial statements, based on the parent’s date of transition to IFRSs, if no adjustments were made for consolidation procedures and for the effects of the business combination in which the parent acquired the subsidiary” (paragraph D16(a)), or at the carrying amounts required by the rest of IFRS 1, based on its own date of transition to IFRSs (paragraph D16(b)).

If the Act took effect on 1 January 2028, a bank with an accounting period equal to the calendar year, for example, would prepare its first individual financial statements under IFRS as of 31 December 2028. With one comparative year, the date of transition to IFRSs would be 1 January 2027, and employee benefit obligations would be measured under IAS 19 as of 1 January 2027, 31 December 2027 and 31 December 2028.

Entities that stay with Czech regulations

Other accounting entities will follow the Act and its implementing decree. The decree has not yet been issued; its intended content is described in the outline attached to the bill (“Outline of the implementing decree of the Accounting Act for entrepreneurs and non-profit accounting entities”). On employees and provisions, it states:

  • “Liabilities from received performance, such as from […] the work of employees, including liabilities from the entitlement to leave not taken by the employee by the end of the year, or liabilities from bonuses due to an employee on the basis of a promise given by the accounting entity, are not a provision.” (point XIII.3(c))
  • Unpaid leave, including leave carried forward to the next year, “will be a liability to employees, not a provision” (point XX.1).
  • “Estimated items as separately presented receivables and liabilities cease to exist.” (point XII.1)
  • “The present value of a provision is determined using a market interest rate that takes into account the risk specific to this liability (see also IAS 37.47). A long-term provision gradually increases by interest; this is always an expense.” (point XIII.8)

The outline does not expressly mention retirement bonuses or jubilee bonuses. For accounting periods beginning before the new Act takes effect, the current Act applies (§ 278); how to present these bonuses under it is explained in the guide Czech Republic: NÚR I-52.

Sources

We calculate your employee benefit provision under IAS 19.

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