The Polish National Accounting Standard (NAS)

Bookkeeping, especially in the case of entities with complex structures, comes with a lot of responsibility. The consequences of even seemingly minor irregularities, often turn out to be very far-reaching. The high frequency of changes and amendments to the already complex regulations does not make the situation easier. Agile and efficient manoeuvring in the maze of their peculiarities constitutes quite a challenge, even for the most experienced accountants. Taking into consideration the importance of proper bookkeeping, the so-called National Accounting Standards have been introduced in Poland in addition to numerous legal provisions. From the article below, you will find out what the National Accounting Standards are and what their purpose is.

What are the National Accounting Standards (NAS) and what is their purpose?

The main goal of the National Accounting Standards is to establish the principles applicable to the correct recognition of business operations. Using the National Accounting Standards is not obligatory. Nevertheless, it ensures that the accounting of a given entity is conducted fairly and in accordance with the regulations.

It is worth mentioning that there are both national and international accounting standards.

International Accounting Standard (IAS) or International Financial Reporting Standards (IFRS) have been established in response to the need of unifying reporting standards on an international scale. They are a consequence of the development of the international capital market and the increasing number of international transactions. This became particularly important after the rise of the European Union and the OECD (Organization for Economic Cooperation and Development).

National Accounting Standards (NAS) are the standards and interpretations concerning accounting in Poland. They can be used as an aid to the correct record of economic operations in Poland in the areas that are not specified in the Accounting Act. The National Accounting Standards are developed by the Accounting Standards Committee of the Ministry of Finance.

Basic legal acts governing accounting in Poland

The accounting principles in Poland regulate the Accounting Act of 29th September 1994.

Provisions of the Accounting Act apply to the entities specified therein, including those with their registered office or place of management in the territory of the Republic of Poland:

• commercial companies and partnerships (including those in the process of formation);
• other legal entities, with the exception of the State Treasury and the National Bank of Poland;
• natural persons, civil-law partnerships formed by natural persons, civil-law partnerships formed by natural persons and inherited enterprises, general partnerships formed by natural persons, limited liability partnerships and inherited enterprises operating pursuant to the Act of 5 July 2018 on Succession Administration of a Natural Person’s Enterprise and Other Facilitators Related to the Succession of Enterprises (Dziennik Ustaw 2018, item 1629), if their net revenue from the sale of goods, products, and financial operations for the previous financial year amounted at least to the equivalent of EUR 2,000,000 in PLN;
• inherited enterprises operating pursuant to the Act of 5 July 2018 on Succession Administration of a Natural Person’s Enterprise and Other Facilitators Related to the Succession of Enterprises, provided that accounting books were kept as at the day preceding the day of opening the estate;
• organisational units operating on the basis of Banking Law, provisions on trading in securities, provisions on investment funds and management of alternative investment funds, provisions on insurance and reinsurance activity, provisions on credit and saving unions, or provisions on organising and operating pension funds, regardless of the revenue amount;
• gminas, poviats, voivodships, and their associations, as well as: a) budgetary units of the state, gminas, poviats, and voivodships, b) budgetary establishments of the state, gminas, poviats, and voivodships;
• unincorporated organisational units, with the exception of the companies and partnerships referred to in subparagraphs 1 and 2;
• branches and representative offices of foreign entrepreneurs within the meaning of the provisions of the Act on the Rules for the Participation of Foreign Entrepreneurs and Other Foreign Persons in Business Transactions Within the Territory of the Republic of Poland, of 6 March 2018;
• entities not listed above if their assigned tasks are financed with grants or subsidies from the state budget, budgets of local government units, or special-purpose funds – from the beginning of the financial year in which a grant or subsidy was obtained.

Additionally, there are several dozen regulations of the Council of Ministers and the Minister of Finance in the field of specific accounting principles, and several executive regulations to the Accounting Act itself.

For cases not regulated by the provisions of the Accounting Act, every entity may apply the National Accounting Standards.

National Accounting Standards and the Accounting Act

As it was mentioned above, National Accounting Standards may be applied when a given matter has not been regulated in the Accounting Act or has been insufficiently explained.

Depending on the adopted accounting principles, an entity may apply all or only selected National Accounting Standards.

When informing in the financial statements about the adopted accounting principles, the economic entity also reports on the application of National Accounting Standards. Using only certain standards selectively is not appropriate. However, this does not apply when an entity notifies that only selected National Accounting Standards have been included in its accounting policies. In that case, the entity may apply only those standards indicated by itself.

What areas are covered by the National Accounting Standards?

The National Accounting Standards govern proper accounting activities in the following areas:

• Statement of cash flows;
• Income tax;
• Construction services in progress;
• Asset impairment;
• Leasing, hiring and rental;
• Provisions, accruals of costs, contingent liabilities;
• Changes in accounting principles (policy), estimated values, correction of errors, events after the balance sheet date;
• Development activity;
• Statement of the economic activity;
• Public-private partnership agreements and concession agreements for construction works or services;
• tangible assets;
• Agricultural activity;
• Production costs as a basis for products’ pricing;
• Continuation of business activity and accounting of entities in the absence of further operations.
• Revenues on sales of goods, semi-finished products, commodities and materials.

The Standards can be found on the official website of the Ministry of Finance. It always contains an up-to-date list of standards currently in force.

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