Financial Circle Breakfast
Our traditional and regular CFO forum, the Financial Circle Breakfast, is an event designed specifically for finance directors, where they can discuss relevant and current issues that support their strategic decisions. The event brings together Chief Financial Officers and Finance Directors of several Hungarian companies making it an excellent occasion to network and share their experience.
In the second half of 2010 we conducted a research among Hungarian companies to survey their opinion on Hungary's tax regime and morale as well as to collect ideas on the ways to transform the system, which were submitted to the competent Ministry. From the information gathered we prepared a summary report and analysis, which together with the conclusions was presented by László Kelemen, Senior Manager, Tax.
Gábor Molnár, Senior Manager at the Deloitte Audit service line, presented the changing international accounting rules of lease purchase and rental lease transactions. The currently used way of recognising rental or operative lease in the books of the lessee will be replaced by a method of disclosing all rentals and lease purchases similarly to financial lease. This change affects all companies preparing IFRS and US-GAAP financial statements and might also concern their income statements. As a result, financing banks and leasing companies, as well as real property and other asset owners could easily find themselves in a different position.
Lajos Antal, Partner of Security & Privacy, warned CFOs to be aware of the issues of protecting, monitoring, and publishing confidential data produced through business processes and presented solutions which can prevent data leakage. There was a sudden increase in the number of incidents; and yet most of the companies still focus on technologies with limited capabilities of warding off misuse instead of working out ways of comprehensive prevention.
Júlia Szarvas dr, attorney-at-law of Ember and Szarvas Law Firm highlighted serious consequences of failing to comply with the obligation of disclosure. Failing to disclose the financial statements might also entail the dissolution of a company within short notice, a sanction first applicable to most of the companies only as from 30 May. In the presentation we briefly addressed other duties associated with the financial statements such as the documentation of dividend distribution and the possible ways of settling equity problems.
Furthermore, Csaba Márkus dr, Director, R&D and government incentives introduced EU co-financed grant opportunities for large companies' capacity extension and headcount increasing projects. He referred to the future of cash grants provided on an individual basis by the Hungarian Government and coordinated by ITD Hungary and he also talked about the significant reduction in the aid intensity of projects to be implemented in Budapest from 2011 and potential ways to avoid its unfavourable effects.
On this occasion, we drew the attention to the new draft VAT Act and its far-reaching implications to business.
We also highlighted the most significant changes concerning IFRS, the International Financial Reporting Standards, which are widely acknowledged as one of the best tools to demonstrate corporate transparency, especially in today`s volatile environment.
Finally, Deloitte experts presented a "roadmap " to be used to successfully meet the complex and changing expectations towards the CFO being the strategist/operator/catalyst/steward at the same time.
On this occasion, we focused on the challenges evidenced in the field of liquidity management, employment law and liquidation processes.
Following an introduction by Tax Partner-in-Charge dr. Attila Kövesdy, Financial Advisory Services Director Balázs Csűrös disserted how companies in the current economic circumstances are turning to their internal reserves, which gives strategic importance to liquidity management. .
Dr. Júlia Szarvas, lawyer of the correspondent law firm of Deloitte Hungary, Ember and Szarvas Law Firm, elaborated on how retaining qualified workforce can prove to be a competitive edge, difficult to be offset by competitors later on. We gave an overview of ways under the employment law to achieve cost reduction.
We also summarized how, in the inevitable case of making staff redundant, compliance with the law can be ensured. In his presentation dr. Csaba Ember informed the audience of how companies can enforce their claims effectively by initiating bankruptcy proceedings. We also discussed the anticipated changes in the Act on Bankruptcy, which are meant to secure the frame of a successful company restructuring.