Croatia
| Extent of IFRS application | Status | Additional Information |
|---|---|---|
| IFRS Standards are required for domestic public companies |
|
All domestic companies whose securities trade in a regulated market are required to use IFRS Standards as adopted by the EU in their consolidated financial statements. |
| IFRS Standards are permitted but not required for domestic public companies | ||
| IFRS Standards are required or permitted for listings by foreign companies |
|
IFRS Standards as adopted by the EU are required in their consolidated financial statements except that a foreign company whose home jurisdiction’s standards are deemed by the EU to be equivalent to IFRS Standards may use its home standards. |
| The IFRS for SMEs Standard is required or permitted | No. | |
| The IFRS for SMEs Standard is under consideration | No. |
Organisation
Financial Reporting Council (FRC) of the Ministry of Finance of the Republic of Croatia.
Računovodstvo i financije (RiF) [Croatian Association of Accountants and Financial Experts].
Role of the organisation
The Ministry of Finance of the Republic of Croatia has the authority to set accounting standards in Croatia. The FRC is a committee established under the Ministry by the Accounting Act. The FRC is an expert body with nine members appointed by the Minister of Finance with approval of the Croatian government.
The Croatian Association of Accountants and Financial Experts is the national professional body of accountants. It advises the Ministry of Finance with regard to accounting standards.
Website
Email contact
Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?
Has the jurisdiction made a public commitment towards IFRS Standards as that single set of high quality global accounting standards?
What is the jurisdiction's status of adoption?
Additional comments provided on the adoption status?
As a member state of the European Union, Croatia is subject to EU 1606/2002 Regulation on the application of international accounting standards (IAS).
The EU IAS Regulation requires application of IFRS Standards as adopted by the EU for the consolidated financial statements of European companies whose securities trade in a regulated securities market starting in 2005. The EU IAS Regulation gives member states the option to require or permit IFRS Standards as adopted by the EU in separate company financial statements (statutory accounts) and/or in the financial statements of companies whose securities do not trade on a regulated securities market. See the Profile for the European Union for more detailed information about the EU IAS Regulation.
There is one regulated market in Croatia – the Zagreb Stock Exchange.
Croatia used the option under the IAS Regulation as follows:
Companies whose securities trade in a regulated market
- Require IFRS Standards as adopted by the EU in the consolidated financial statements of companies whose securities trade on a regulated market.
- Require IFRS Standards as adopted by the EU in the separate company financial statements of companies whose securities trade on a regulated market.
Companies whose securities do not trade in a regulated market
- Require IFRS Standards as adopted by the EU in both the consolidated and separate company financial statements of all banks, insurance companies, leasing companies, and other financial institutions including those whose securities do not trade in a regulated market.
- Require IFRS Standards as adopted by the EU in both the consolidated and separate company financial statements of all “large entrepreneurs”. According to the Accounting Act to be classified as “large entrepreneurs” the companies have to fulfil two of the following three conditions in their previous financial year: (1) total revenue greater than 260 million HRK (approximately US$45 million); (2) total assets greater than 130 million HRK (approximately US$23 million); and (3) an average number of employees in excess of 250. Also, all banks and saving institutions, pension funds, insurance companies, leasing companies, and companies that manage pension and insurance funds are considered “large entrepreneurs” regardless of their actual size. This is a requirement of the Croatian Accounting Act.
If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Standards in the jurisdiction.
For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED?
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
Are IFRS Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
For instance, are IFRS Standards required or permitted for companies whose securities do not trade in a public market?
Required for some and permitted for others. Specifically:
- IFRS Standards as adopted by the EU are required in both the consolidated and separate company financial statements of all “large entrepreneurs” (as defined above).
- All other companies are classified as either “medium entrepreneurs” or “small entrepreneurs” and are required to prepare their standalone and consolidated financial statements in accordance with Croatian Financial Reporting Standards.
If the jurisdiction currently does NOT require or permit the use of IFRS Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Standards for such companies in the future?
For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:
Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Standards in their consolidated financial statements?
If YES, are IFRS Standards REQUIRED or PERMITTED in such cases?
Required for some and permitted for others. Foreign companies whose securities trade in a regulated market in Croatia (and generally in the EU) are required to report under IFRS Standards as adopted by the EU for their consolidated financial statements unless the European Commission has deemed their local accounting standards to be equivalent to IFRS Standards, in which case they may use their local standards. This is laid out on the ‘Financial Reporting’ page of the European Commission’s website.
Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
Which IFRS Standards are required or permitted for domestic companies?
The auditor's report and/or the basis of presentation footnote states that financial statements have been prepared in conformity with:
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Standards and the jurisdiction’s GAAP)?
Are IFRS Standards incorporated into law or regulations?
If yes, how does that process work?
If no, how do IFRS Standards become a requirement in the jurisdiction?
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Standards (including Interpretations) in place?
If yes, what is the process?
If no, how do new or amended IFRS Standards become a requirement in the jurisdiction?
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Standards and/or made any modifications to any IFRS Standards?
Yes.
If yes, what are the changes?
Other comments regarding the use of IFRS Standards in the jurisdiction?
Are IFRS Standards translated into the local language?
Yes.
The European Union has 24 official and working languages. They are: Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish and Swedish. Before they are published in the Official Journal of the European Union, and therefore become binding under EU law, individual IFRS Standards must be translated into all of those languages (other than English and Irish).
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Standards?
Pursuant to a copyright waiver agreement with the Directorate-General for Translation of the European Commission, the Commission takes care of the translation into the official languages according to their own translation process. The translation only covers the standards and mandatory guidance, which is then published in the Official Journal of the European Union.
In addition, some countries (usually the standard setter or institute) have a translation contract with the IFRS Foundation to produce an ‘official translation’ for publication of a bound volume of IFRS Standards (usually the ‘Red Book’) and publication, in some cases, of individual standards and exposure drafts.
