Change in the Definition of the Net Turnover Item from 1 January 2024 and Recognition of the Prior Period in the Profit and Loss Account

From 1 January 2024, the definition of net turnover was changed in Act No. 563/1991 Coll., on Accounting, among other things. This affects accounting entities primarily in the context of categorisation (classification into the correct category of accounting entity) and the related evaluation of the obligation to audit the financial statements.

A question has arisen among the professional public as to how to present information on turnover for the comparative period (i.e. the previous period - the year 2023), where the original definition of net turnover was still valid, when preparing the financial statements for the accounting period starting in 2024, in particular in the profit and loss account.

The Chamber of Auditors of the Czech Republic raised a methodological question to the Ministry of Finance. The subject of the request for an opinion was to determine whether to exclude this prior period figure (comparative figures) from the profit and loss account, to show the 2023 figure, or to recalculate the 2023 net sales figure according to the new definition?

The Ministry of Finance considers that the most appropriate solution is not to include the net turnover for the previous accounting period in the profit and loss account in the financial statements for 2024.