- Accounting standards require an obligation of inventory procedure directly through the requirement for true and fair presentation in the financial statements. According to Article 15 of the Accounting Act and Article 66, paragraph 14 of the General Tax Act, the obligation of the entrepreneur is prescribed by which during the business year and at the latest at the end of the business year, assets and liabilities should go through the inventory procedure and the bookkeeping balance should be harmonized with the actual balance determined by the inventory procedure (list).
- In accordance with the Accounting Act, the entrepreneur must list assets and liabilities and state their individual quantity and cash values at the beginning of business activity, in cases of status changes or when opening bankruptcy proceedings or initiating liquidation.
- The annual inventory is conducted at the end of the business year and shows the balance of assets and liabilities on the last day of the business year (December 31 or the last day of the business year if the business year differs from the calendar year). The decision on the inventory list is made by the Management Board (or the director). It would be best to conduct the inventory as close as possible to the end of the year. The Act does not specify how many days before or after the end of the year.
- Penalties – for non-implementation of the annual inventory of assets, according to the General Tax Act, a fine of HRK 2,000.00 to HRK 200,000.00 is stated for an entrepreneur and from HRK 2,000.00 to HRK 20,000.00 for a responsible person in legal person (Article 194, paragraph 1, item 2 and Article 194, paragraph 4). According to Article 42, paragraph 1, item 13 and Article 42, paragraph 2 of the Accounting Act a fine from HRK 10,000.00 to HRK 100,000.00 is stated for an entrepreneur and from HRK 5,000.00 to HRK 20,000.00 for the responsible person in legal person.
You can find out more about our inventory procedure, required documentation and regulations from our consultants.
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Please keep in mind the fact that legislation is subject to frequent change. This newsletter is therefore necessarily based on our understanding and correct interpretation of the law and practice at the time of publication of this newsletter. This newsletter will not be updated due to changes in legislation that occur after the issuance of this letter.
NEWSLETTER_Annual inventory of assets for 2021