IFRS VERSUS CZ GAAP: ANALYSIS OF CONSTRUCTION CONTRACTS ACCOUNTING AND IMPACT ON FINANCIAL INDICATORS

The entrance of the Czech Republic to the European Union brought the obligation to implement International Financial Reporting Standards (IFRS) to the Accounting Act. IFRS solves some accounting problems differently than the Czech General Accepted Accounting Principles (CZ GAAP) which can result in a different financial indicators value. Those indicators are then used by investors to assess the financial performance of companies and the application of IFRS instead of CZ GAAP can lead to distinct presentation of enterprise performance. The paper identifies differences in the financial statements after CZ GAAP and IFRS and assesses the impact on selected creditworthy and bankruptcy models, especially the impact of accounting for construction contracts after IAS 11. The research focuses on three models - Altman's Z-Score, IN05 and Creditworthy index. The paired t-test is used to analyse the data collected and to identify if the distinctions in the financial indicators after diverse accounting systems are significant.