NI-74 Valuation of Financial Investments in Contributions and Divisions by Separation

At the end of February, the National Accounting Council (NÚR) approved a draft interpretation for the public comment period regarding the valuation of financial investments in cases of contributions and divisions by separation (rozdělení vyčleněním).

This draft interpretation responds to the current lack of a comprehensive accounting framework for these types of transformations. The concept of "division by separation" is relatively new to the public, as it was introduced through the 2024 amendment to the Act on Transformations.

The interpretation addresses questions on how to value the acquired share at the level of the contributor or the company being divided by separation, particularly in situations where:

• The resulting investment value is negative;

• The contribution involves a valuation difference on acquired assets or goodwill;

• The contributed assets include allowances (opravné položky) or provisions (rezervy) related to the contribution.

The fundamental solution for valuing a financial investment at the contributor's level should be the net book value (net carrying amount) of the contributed item.

The full text of the draft interpretation, including an illustrative example, can be found at this link: https://nur.cz/wp-content/uploads/2026/03/NI-74.pdf

The general public now has the opportunity to comment on NI-74 until April 10, 2026. Following this, the external comments will be reviewed to determine the final form of the interpretation.

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