Accounting Services in Hungary

 

IFRS standards are international financial reporting standards that are used at a global level; they are a set of rules and regulations regarding the manner in which companies should maintain and prepare their financial documents. 

 

An accountant in Hungary can use the IFRS standards when completing accounting reports and documents for international companies that have set up their operations in this country. 

 

For instance, those who want to start the process of company registration in Hungary for a local business will not use the IFRS standards in most of the cases. 

 

The accountant in Hungary will be able to use the IFRS for certain categories of companies, according to the latest modifications, implemented in 2016-2017. 

 

What is the law on accounting in Hungary? 

• • matters related to accounting and bookkeeping are prescribed by the Act C of 2000 on Accounting – the Accounting Act, issued by the Ministry of National Economy;
• • companies can complete simplified annual reports if they meet 2 of the 3 conditions stipulated below;
• • the company has a balance sheet of maximum HUF 500,000;
• • the company’s net revenue is limited to HUF 1,000,000;
• • the company employs a maximum of 50 employees in a financial year. 

 

As presented above, companies are allowed to complete simplified annual accounts, which will be prepared by an accountant in Hungary. 

 

In Hungary, companies must also prepare consolidated annual accounts, which refer to more complex financial documents, that present a very detailed image of the company. 

 

They are necessary for large businesses, and this is the case of structures where there is a parent company and more subsidiaries or branches. 

 

The procedure is necessary if the company meets 2 of the following 3 criteria (if it exceeds 2 of them): the balance sheet of HUF 2,700 million, the annual net revenue of HUF 4,000 million and the number of employees of 250 in a financial year.

 

In certain situations, companies are required to complete audit formalities. Thus, if you plan to open a Hungarian company, we advise you to check the main requirements applicable in this case. 

 

Audit in Hungary has last been amended in 2016, with new regulations being applied starting with 17th of June 2016. The new law transposed the latest modifications that were introduced at an EU level. 

 

Audit rules also derive from the Act LXXV of 2007 on the Chamber of Hungarian Auditors, the Activities of Auditors, and on the Public Oversight of Auditors. 

 

According to these rules, an accountant in Hungary is required to start the audit procedures on a local company if 2 thresholds are met. 

 

The 2 thresholds refer to the company’s annual net sales (the minimum is of HUF 300 million in a financial year) and the company’s employees (the company hired more than 50 employees in the last 2 financial years). 

 

According to the Act LXXV of 2007, the audit can be performed only by an accountant in Hungary who has received the right to act as an auditor. 

 

In other words, all persons who graduated from tertiary studies and have obtained an accounting diploma can be accountants, but not all accountants can be auditors, as additional requirements have to be completed. 

 

For instance, auditors need specialized studies and they must also have at least 3 years of practice. It is also required to work as an apprentice auditor for a member of the Hungarian Chamber of Auditors for a period of 3 years.