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Accounting Regulations in Croatia's Budget System

Get information about the accounting regulations in Croatia's budget system, including the Budget Act and the Chart of Accounts.

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Accounting Regulations in Croatia's Budget System

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  1. Ministryof Finance, Croatia ACCOUNTING REGULATIONS IN THE REPUBLIC OF CROATIA’S BUDGET SYSTEM Zagreb, 2019

  2. Legal framework • Budget Act • The Ministry of Finance is currently in the process of drafting a new Budget Act • Pursuant to the provisions of the Budget Act, the Minister of Finance has passed several rulebooks, inter alia: • Rulebook on Identifying Budget and Extrabudgetary Users of the State Budget, and Budget and Extrabudgetary Users of the Budgets of Local and Regional Self-Government Units and the Manner of Maintaining the Register of Budget and Extrabudgetary Users • Rulebook on Budget Accounting and the Chart of Accounts • Rulebook on Budget Classifications • Rulebook on Financial Reporting in Budget Accounting • Rulebook on Semi-annual and Annual Reports on Budget Execution • All regulations of the Republic of Croatia are published in the Official Gazette whose Croatian title is „Narodne novine“ (https://narodne-novine.nn.hr/).

  3. About the Chart of Accounts • Refer to the State budget and budgets of local and regional self-government units, and budget and extrabudgetary users of the State budget and the budgets of local and regional self-government units which are inthe Register of Budget and Extrabudgetary Users. • TheChartofAccountshaschangedin 2002. (when Croatia hastransferedformthecashprinciple to modifiedaccrualaccountingprinciple). The current accounting plan was adopted in 2014 (2 changes untilnow; the largest changesweremade according to ESA requirements)

  4. Budget Classification • The Rulebook on Budget Classifications prescribes the types, content and application of budget classifications, namely: • Organizational classification, • Program classification, • Functional classification, • Economic classification, • Classification by location and • Funding sources • The economicclassification includes revenues and receipts by their nature and expenditures and outlays by their economic purpose. • Accounts of the economic classification match the accounts in the Chart of Accounts for budgetary accounting, classes 3 – 8 (apart from groups of accounts 39, 49, 59, 69, 79 and 89) and the related sub-groups and sections. Consequently, since 2002, the same accounts have been used, the same codes for accounting and for the budget.

  5. The Chart of Accounts • 0 Non-financial assets • 1 Financial assets • 2 Liabilities • 3 Operating expenses • 4 Expenses for the purchase of non-financial assets • 5 Outlayers on financial assets and loan repayment • 6 Operating revenues • 7 Revenues from the sale of non-financial assets • 8 Receipts from financial assets and borrowing • 9 Own sources. • In classes 0, 1, 2 and 9 are flows and stocks of assets, liabilities and own sources are tracked. • Classes 3, 4, 5, 6, 7, 8 are classes in which current, capital and financial activities are tracked under the prescribed economic classification.

  6. Accounts in the Chart of Accounts are classified into: • classes, • groups, • sub-groups, • sections and • basic accounts. • The application of the Chart of Accounts is mandatory in the budget system (planning, execution, accounting), namely: • at the five-digit level (basic account) in accounting, • at the four-digit level (section) in the financial statements and reports on budget execution • at the three-digit level (sub-group) in the budget and financial plans for the budget year, • at the two-digit level (group) in projections.

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