NI-75 Determining the Timing of Revenue Recognition

In the second half of April 2026, the National Accounting Council (hereinafter "NAC") approved a draft interpretation regarding the determination of the timing of revenue recognition for external public consultation.

This area has been a subject of intense discussion, especially recently, as revenue represents one of the most significant line items in financial statements.

The draft addresses two fundamental questions: when an accounting entity should recognize revenue and in what amount it should be measured.

Unfortunately, current Czech accounting regulations lack specific provisions for determining the timing of revenue recognition from the sale of products, goods, and the provision of services. Therefore, the draft interpretation is based, among other things, on the principles of International Financial Reporting Standards (IFRS).

According to the draft interpretation, an accounting entity shall recognize revenue if:

• it has delivered the product, goods, or service to the customer;

• it is able to reliably measure the revenue;

• it is probable that it will receive consideration from the customer for the products, goods sold, or services provided;

• it is able to reliably measure the costs associated with the revenue.

An integral part of the interpretation is a set of illustrative examples that provide further context to the issue.

The full text of the draft interpretation can be found at the following link: https://nur.cz/wp-content/uploads/2026/05/NI-75.pdf

The general public now has the opportunity to comment on NI-75 until June 7, 2026. Subsequently, the external comments will be addressed, resulting in the final version of the interpretation.

This text was translated by AI.