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Hungary

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Financial reporting framework in Hungary

Adoption of IFRSs in Europe effective in 2005

In June 2002, the European Union adopted an IAS Regulation requiring European companies listed in an EU securities market, including banks and insurance companies, to prepare their consolidated financial statements in accordance with IFRSs starting with financial statements for financial year 2005 onwards. EU countries have the option to:

  • Require or permit IFRSs for unlisted companies.
  • Require or permit IFRSs in parent company (unconsolidated) financial statements.
  • Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007.
  • Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007.

The European IAS regulation applies not only to the 28 EU Member States but also to the three members of the European Economic Area (EEA) - Iceland, Liechtenstein, and Norway.

Hungary is an EU Member State. Consequently, Hungarian companies listed in an EU/EEA securities market follow IFRSs since 2005. The European Commission (EC) periodically issues a document which summarises the use of options of the IAS Regulation by European Union Member States. For information on each country's plans, click to access:

On 12 June 2015, the Hungarian Government  decided to extend the use of IFRSs to the individual accounts of Hungarian companies as follows:

  • Voluntary application of IFRSs from 1 January 2016 for companies whose securities are traded in the European Economic Area (EEA) or whose parent company prepares its consolidated financial statements under IFRS and requires its subsidiaries to prepare IFRS financial statements;
  • Mandatory application of IFRSs from 1 January 2017 for companies whose securities are traded in the EEA and most financial institutions;
  • Voluntary application of IFRSs from 1 January 2017 for insurance companies and companies with obligatory audit of their financial statements;
  • Mandatory application of IFRSs from 1 January 2018 for the remaining financial institutions.

The resolution was recorded in the official gazette on 12 June 2015 as decision 1387/2015. (VI. 12.) (Hungarian language only).

The European Commission has adopted the following wording for use in the notes to the accounts and in the audit reports of companies subject to EU Regulation 1606/2002/EC (the 'IAS regulation'):

  • "in accordance with International Financial Reporting Standards as adopted by the EU" or
  • "in accordance with IFRSs as adopted by the EU".

Companies may also state, in a footnote, compliance with IFRSs as adopted by the IASB, if that is the case.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.