COMPARISON OF LAND ACCOUNTING ACCORDING TO CZECH LEGISLATION AND INTERNATIONAL ACCOUNTING STANDARDS

The article analyses the currently valid accounting procedures for accounting for land that is not a commodity, according to both Czech legislation and International Accounting Standards. The method of process analysis and subsequent comparison is used. It is found that the accounting and valuation of land in the Czech Republic does not reflect reality as land is valued once and for all at historical cost and does not consider the effect of land price increases in the market or possible damage to the land as a result of an environmental accident. In the case of forest land, the value of the land and the forest cover is not accounted for separately. Increasing value due to a growth in timber mass is not taken into account. In contrast, under International Accounting Standards, the value of land must be revalued periodically in response to changing circumstances. In the case of forest land, this involves separate accounting for the land itself under IAS 16 Land, Buildings and Equipment, and for the forest cover under IAS 41 Agriculture. The procedures defined in the International Accounting Standards are more demanding and arduous but give the user significantly more accurate and up-to-date information on the market price of land than the procedures required by Czech legal standards. This enables users to make the right economic decisions. However, the obligation to revalue land periodically in Czech accounting could create a problem in terms of ensuring a sufficient number of qualified valuers.