Reporting of investments in commercial insurance companies after the amendment of the Act on Accounting in 2016 in the Czech Republic

The amendment to Act no. 563/1991 Coll., on Accounting, as amended by Act no. 221/2015 Coll., effective from 1St January 2016 brings changes in the valuation of investments at the reporting date in commercial insurance companies and reinsurance companies. Amendment to Decree no. 502/2002 Coll. as amended, which are effective from 1st January 2016 in the decree should reflect changes in the Act on Accounting. However, it is in some respects inconsistent with the amended Act. As a result, commercial insurance companies are not allowed to follow the amended ordinance because it is in conflict with the Act on Accounting. They can not strictly apply the method laid down by decree because new reporting will not provide enough true and fair view of their financial situation. At the same time, they have no support on how to deal with changes to the Act on Accounting in the decree. The paper deals with changes in the presentation of financial placements before and after the amendment to the Act on Accounting, including the impact on the financial position of commercial insurance or reinsurance companies from 1st January 2016.