LAWON ACCOUNTING (“Off. Herald of RS”, Nos. 73/2019 and 44/2021 - other law) |
Article 1
This Law shall regulate the reporting entities subject to application of this Law, classification of legal persons and sole traders, accounting organizations, accounting legal instruments and types of business ledgers, conditions and method of keeping the business ledgers, the Register of accounting service providers, recognition and valuation of items in financial statements, preparation, submission and publication of financial statements, annual business reports, corporate management reports, reports on payments to government authorities and non-financial reporting, the Register of Financial Statements, the National Accounting Commission, and oversight of the implementation of the provisions of this Law.
Article 2
Individual terms, within the meaning of this Law, shall be understood to have the following meanings:
1) Legal persons shall include companies, the National Bank of Serbia, banks, payment institutions, electronic money institutions, insurance companies and reinsurance companies (hereinafter: insurance companies), providers of financial leasing, pension funds and companies for voluntary pension fund management, investment funds and companies for investment fund management, stock exchanges and broker-dealer companies, Central Securities, Depository and Clearing House, factoring companies, cooperatives, institutions that perform a for-profit business activity, legal persons that, in accordance with special regulations, apply the provisions of this Law as well as other legal persons as determined by this Law;
2) Other legal persons shall be considered to be the legal persons whose business operations are partly financed from government revenue or other dedicated sources of funding, and revenue in part or fully earned in the market or on the basis of membership and that are not established for profit earning (political organizations, trade unions with the capacity of a legal person, foundations and endowments, associations, chambers, churches and religious communities in the part relating to the performance of economic or other activities in compliance with the regulations that govern the performance of these activities, as well as other organizations established on the basis of membership);
3) Sole traders are natural persons within the meaning of the law regulating companies, who keep their business ledger by the double-entry bookkeeping system, unless where provided otherwise by special regulations;
4) International Financial Reporting Standards (hereinafter referred to as IFRS), within the meaning of this Law, are: Conceptual Framework for Financial Reporting, International Accounting Standards - IAS, International Financial Reporting Standards - IFRS, interpretations issued by the International Financial Reporting Interpretations Committee - IFRIC, the translation of which has been determined and published by the Ministry in charge of finances (hereinafter: the Ministry). The translation of IFRS that is determined and published by the Ministry shall comprise of the Conceptual Framework for Financial Reporting, the main texts of IAS and IFRS issued by the International Accounting Standards Board, as well as interpretations issued by the International Accounting Standards Interpretations Committee, in the form in which they were issued, and which do not include the bases for deduction, illustrated examples, guidelines, comments, opposing opinions, elaborated examples and other supplementary explanatory material that may be adopted in relation to the standards i.e. interpretations, unless explicitly stated that it constitutes an integral part of the standards i.e. interpretations;
5) International Financial Reporting Standards for Small and Medium-Sized Entities (hereinafter referred to as IFRS for SMEs) is an accounting standard for financial reporting for small and medium-sized legal persons, approved by the International Accounting Standards Board (IASB), the translation of which is determined and published by the Ministry. The translation of IFRS for SMEs determined and published by the Ministry comprises the basic text of the IFRS for SMEs issued by the International Accounting Standards Board;
6) Regular annual financial statement is a report that should give a true and fair view of the financial position and success of operating performance (for example, of assets and liabilities of the legal person i.e. sole trader, as well as profit and loss) of a legal person i.e. sole trader, and that is prepared for the financial year that is equal to the calendar year or that is different from the calendar year;
7) Consolidated annual financial statement is the financial statement of an economic entity (group) comprising of a parent entity and all subsidiary legal persons;
8) Interim financial statement shall be prepared in cases of status changes (in the case of a status change of acquisition, the interim financial statement shall be prepared by a legal person that terminates its operations, while in the case of a status change of spin-off the interim financial statement is prepared by the legal person that in the procedure of the change spins off a part of its assets and liabilities, unless where prescribed otherwise by a special law), opening i.e. closing of bankruptcy proceedings or initiating i.e. closing of liquidation proceedings over a legal person, with the balance as of the date preceding the day of entry of the status change, date of opening i.e. closing of bankruptcy proceedings or opening i.e. closing of liquidation proceedings. The interim financial statement shall also be prepared in cases of deletion of a branch of a foreign legal person referred to in Article 4, paragraph 3 of this Law i.e. of a sole trader referred to in item 3) of this Article;
9) Legal regulations shall be understood to mean this Law and secondary legislation adopted for the implementation of the law;
10) Internal regulations, within the meaning of this Law, shall be understood to mean the by-laws adopted by a legal person i.e. a sole trader, which comprise specific instructions and guidelines for the organization of accounting and maintenance of business ledgers, the accounting policies for the recognition and valuation of assets and liabilities, revenues and expenditures, as well as other matters related to keeping business ledger and preparation of financial statements that are regulated by a by-law of a legal person i.e. of a sole trader, as prescribed by this Law;
11) Balance sheet date shall be the day on which financial statements are prepared, i.e. the day on which the reporting period ends;
12) Balance Sheet shall mean the financial statement in which assets, liabilities and equity are presented as at a specified date (on the balance sheet date);
13) Income Statement shall mean the financial statement in which revenues, expenditures and operating results accomplished over the reporting period are presented;
14) Statement of Other Comprehensive Income shall mean the financial statement consisting of revenue and expenditure items that are not recognized in Income Statement but, as required by individual IFRS, i.e. IFRS for SMEs are recognized within equity;
15) Statement of Changes in Equity shall mean the financial statement which presents information on changes in equity over the reporting period;
16) Statement of Cash Flows shall mean the financial statement which provides information on inflows and outflows of cash and cash equivalents over the reporting period;
17) Notes to Financial Statements shall mean the financial statement which contains descriptions or breakdown of items disclosed in other financial statements, the accounting policies applied, as well as information on items that did not qualify for recognition in these statements and are important for assessing the financial position and operating performance, as well as other information in accordance with the requirements of IFRS, i.e. IFRS for SMEs, of this Law, i.e. the secondary legislation referred to in Article 26 of this Law;
18) Statistical Report shall mean the report in which individual items of the Balance Sheet and Income Statement, as well as other data used for statistical purposes, are presented in more detail;
19) A public-interest undertaking shall mean a legal person that is in compliance with the provisions of the law regulating auditing classified as a public-interest undertaking;
20) Shares (stocks, i.e. stakes in compliance with the law regulating companies) represent a right in equity of other legal persons, irrespective of whether materialized in the form of certificates or not, which are, on the basis of the permanent connection to such legal persons, acquired with the intention of contributing to the business operations of the legal person holding such rights. It shall be considered that the share in equity of another legal person represents a stake within the meaning of application of this Law in the case where such share represents 20 or more percents of equity of such other legal person;
21) A related party shall mean the natural or legal person that is associated with the legal person within the meaning of IFRS;
22) Operating revenue shall mean the amount generated from the sale of products and goods and from provision of services, following the deduction of discounts, value added tax and other taxes directly related to the revenue;
23) Parent legal person shall mean the legal person that is controlling one or more subsidiary legal persons;
24) Subsidiary legal person shall mean the legal person that is controlled by the parent legal person, including all the subsidiary legal persons of the end parent legal person;
25) Group shall mean the parent legal person and all its subsidiary legal persons that with the parent legal person make a single economic whole;
26) Related legal persons shall be any two or more legal persons within a group;
27) A legal person connected by a stake shall mean a legal person in which another legal person holds a stake and over whose operational and financial policy such other legal person exercises significant influence. It shall be considered that a legal person is exercising a significant influence over another legal person if it holds 20 or more percent of voting rights of the shareholders or members in such other legal person, unless where regulated otherwise by a special regulation;
28) A materially significant item shall mean the item whose omission or misstatement may impact the decisions passed by the users of the financial statements. Materiality of individual items shall be assessed in the context of other similar items;
29) Bankruptcy estate within the meaning of this Law shall be the assets of the bankruptcy debtor which is subject to continuation of bankruptcy proceedings in case of a suspension or closure of such proceedings over the bankruptcy debtor, within the meaning of the law regulating bankruptcy;
30) Approval data for disclosure of financial statements shall be the date on which the competent body of a legal person i.e. sole trader (in most of the cases the legal representative) has permitted that the financial statements are disclosed (delivered to the supervisory body, shareholders' assembly, etc.). The approval date for disclosure shall serve for determining the events following the balance sheet date;
31) A legal person active in extractive industry shall mean a legal person pursuing a business activity that includes exploration, prospecting, discovering, development and extraction of coal, crude oil and natural gas, metal ores, non-ferrous ores, other mining and extraction of stone, sand, clay, gravel, etc.;
32) A legal person engaged in cutting of primary forests shall mean a legal person that pursues the business activity of cutting threes in the forest (does not include cutting trees in multiannual plantations);
33) Governmental authority, within the meaning of this Law, shall be any national, regional or local public authority of the Republic of Serbia, a Member State or a third country. That shall additionally include a department, agency or company controlled by such governmental authority within the meaning of the provisions of Articles 39 and 40 of this Law;
34) A project, within the meaning of this Law, shall mean the operational activities regulated by one contract, license, lease, concession or a similar agreement and shall provide the basis for payment of liabilities vis-à-vis the governmental authorities. Where a number of such contracts are significantly mutually related, these shall then be considered to be a single project;
35) Payment, within the meaning of this Law, shall be amount that is paid, either in money, goods, services or rights for the activities of the legal persons referred to in items 31) and 32) of this Article. Payments can have the form of:
(1) Rights to production;
(2) Tax on income, production or profit of legal persons, excluding the consumption taxes such as the value added tax, personal income tax or excise taxes;
(3) Preference;
(4) Dividends;
(5) Signature, discovery and production bonuses;
(6) License fees, lease fees, entry fees and other licenses and/or concessions; and
(7) Payments for the infrastructural improvements;
36) Member State - a member state of the European Union.
Determining and Publication of Translations of IFRS and IFRS for SMEs
Article 3
The translations of IFRS, i.e. of IFRS for SMEs shall be determined by a decision by the Ministry.
The decision referred to in paragraph 1 of this Article, whereby the date of beginning of implementation of IFRS, i.e. IFRS for SMEs is determined as well, together with the text of IFRS, i.e. IFRS for SMEs translation, shall be published by the Ministry in the "Official Herald of the Republic of Serbia" and on the website of the Ministry.
Where that is envisaged by a special law, application of IFRS shall be permitted even before the date referred to in paragraph 2 of this Article.
The Ministry shall permanently publish the translations of IFRS and IFRS for SMEs on its website and to clearly designate the period over which the published version of the translated IFRS and IFRS for SMEs in question applies.
Reporting Entities under the Law
Article 4
Provisions of this Law shall pertain to the legal persons referred to in Article 2, items 1) and 2) of this Law and sole traders referred to in Article 2, item 3) of this Law.
Provisions of this Law shall additionally pertain to the legal persons and other forms of organizing established by a legal person abroad, if they are not required by regulations of those countries to keep business ledgers and prepare financial statements.
Provisions of this Law shall also pertain to branches and other organizational parts of legal persons domiciled abroad that pursue business activities in the Republic of Serbia, unless where regulated otherwise by special regulations.
Provisions of this Law pertaining to the legal persons shall apply mutatis mutandis to the legal persons in bankruptcy with bankruptcy estates referred to in Article 2, item 29) of this Law.
Provisions of this Law shall not apply to the budgets and budget beneficiaries, residential buildings, as well as mandatory social insurance organizations, unless where provided otherwise by special regulations.
Provisions of this Law shall not apply to churches and religious communities, with the exception of the part relating to the pursuit of business or other activities, in compliance with the regulations governing the pursuit of these activities.
The Ministry shall, within 30 days from the occurrence of change, notify the European Commission of the changes of types of companies to which this Law pertains.
Obligations of Legal persons and Sole traders
Article 5
Legal persons and sole traders shall perform the keeping of business ledgers, the recognition and valuation of assets and liabilities, revenues and expenditures, and the preparation, presentation, submission and disclosure of information in financial statements in accordance with this Law.
A public-interest entity shall apply the rules prescribed by this Law for the large legal persons irrespective of the operating revenues, the value of their entire assets or the average number of employees during a financial year, except in the cases prescribed by this Law.
Classification of Legal persons and Sole traders
Article 6
The legal persons and sole traders, within the meaning of this Law, shall be classified into micro, small, medium-sized and large entities, depending on the average number of employees and operating revenue for a financial year and the value of total assets determined as at the balance sheet date of the regular annual financial statement.
The legal persons and sole traders that on the balance sheet date do not exceed the limit values of two of the following criteria shall be classified as micro legal persons:
1) Average number of employees of ten;
2) Operating revenue of EUR 700,000 in Dinar exchange value;
3) Value of the total assets as at the balance sheet date of EUR 350,000 in Dinar exchange value.
The legal persons and sole traders that as at the balance sheet date cross the limit values of the two criteria referred to in paragraph 2 of this Article, but do not cross the limit values of two of the following criteria shall be classified as small legal persons:
1) Average number of employees of 50;
2) Operating revenue of EUR 8,000,000 in Dinar exchange value;
3) Value of total assets as at the balance sheet date of EUR 4,000,000 in Dinar exchange value.
The legal persons and sole traders that as at the balance sheet date cross the limit values of the two criteria referred to in paragraph 3 of this Article, but do not cross the limit values of two of the following criteria shall be classified as medium-sized legal persons:
1) Average number of employees of 250;
2) Operating revenue of EUR 40,000,000 in Dinar exchange value;
3) Value of total assets as at the balance sheet date of EUR 20,000,000 in Dinar exchange value.
The legal persons and sole traders that as at the balance sheet date cross the limit values of two criteria referred to in paragraph 4 of this Article shall be classified as large legal persons.
A legal person, i.e. a sole trader shall perform the classification in accordance with the aforementioned criteria autonomously as at the date of the regular financial statements’ balance sheet and utilize the data obtained for the following financial year.
The official middle exchange rate determined by the National Bank of Serbia and applicable for the date of the balance sheet of the regular annual financial statement shall be used for conversion of the foreign currency amounts referred to in paragraphs 2 through 4 of this Article into Dinar exchange value.
Newly established legal persons i.e. sole traders shall be classified based on the data from the financial statements for the financial year in which they were established and the number of months of operation, and data thus determined shall be used for the current financial year.
The average number of employees of shall be calculated by dividing the sum of the total number of employees at the end of each month, including the employees abroad, by the number of months of the financial year.
The legal person, i.e. the sole trader shall deliver the notification of classification, within the meaning of this Law, enclosed with the financial statements, to the Business Registers Agency (hereinafter: the Agency), which shall verify the delivered notification of classification.
If a legal person, i.e. sole trader refuses to bring the notification on classification in line with the request of the Agency, data on the size of the legal person, i.e. sole trader determined by the Agency shall be used in the following financial year.
The National Bank of Serbia, banks, insurance companies, providers of financial lease, voluntary pension funds, companies for voluntary pension fund management, Central Securities Depository and Clearing House, investment funds, companies for investment fund management, stock exchanges and broker-dealer companies, payment institutions and electronic money institutions, as well as factoring companies within the meaning of this Law shall be regarded as large legal persons.
Exceptions in this Law applicable to small legal persons shall apply mutatis mutandis to micro legal persons. It shall be necessary that one of the following two conditions is fulfilled in order for the exception to apply:
1) The legal person has been classified as a small legal person for at least two consecutive financial years; or
2) The legal person is newly established in the current financial year and is classified as a small legal person for that year.
Provisions of paragraph 13 of this Article shall apply mutatis mutandis to the small groups referred to in Article 7, paragraph 1 of this Law.
Classification of Groups of Legal persons
Article 7
Small groups of legal persons shall be the groups comprising of a parent legal person and subsidiary legal persons that are subject to consolidation of financial statements and that, on the consolidated basis, as at the balance sheet date of the parent legal person, do not exceed the limit values of two of the following criteria:
1) Average number of employees of 50;
2) Operating revenue of EUR 8,000,000 in Dinar exchange value;
3) Value of total assets as at the balance sheet date of EUR 4,000,000 in Dinar exchange value.
The medium-sized groups of legal persons shall be the groups that are not small groups and that comprise of a parent legal person and subsidiary legal persons that are subject to consolidation of financial statements and that, on the consolidated basis, as at the balance sheet date of the parent legal person do not exceed the limit values of two of the following criteria:
1) Average number of employees of 250;
2) Operating revenue of EUR 40,000,000 in Dinar exchange value;
3) Value of total assets as at the balance sheet date of EUR 20,000,000 in Dinar exchange value.
The large groups of legal persons shall be the groups that comprise of a parent legal person and subsidiary legal persons that are subject to consolidation of financial statements and that, on the consolidated basis, as at the balance sheet date of the parent legal person exceed the limit values of the two out of three criteria from the paragraph 2 of this Article.
Classification of a group in compliance with the abovementioned criteria shall be performed by the parent legal person independently, as at the balance sheet date of the consolidated annual financial statements and data thus obtained shall be used for the current financial year.
The middle exchange rate that is determined by the National Bank of Serbia and that is applicable on the balance sheet date of the consolidated annual financial statement shall be used for the conversion of the foreign currency amounts referred to in paragraphs 1 and 2 of this Article into Dinar exchange value.
II ORGANISATION OF ACCOUNTING AND ACCOUNTING DOCUMENTS
Article 8
Legal persons i.e. sole traders shall regulate through their bylaws, in compliance with this Law, the organization of accounting in such a manner as to allow comprehensive recording, as well as prevention and timely discovering of incorrectly recorded business changes; they shall regulate internal accounting control procedures, establish accounting policies, designate the persons responsible for legality and accuracy of occurring business changes and the preparation and control of accounting documents pertaining to the business change; they shall regulate circulation of accounting documents and determine time limits for their submission for further processing and posting in the business ledgers.
A legal person, i.e. a sole trader shall determine the types and the form of the subsidiary ledgers that it shall keep by its bylaw that is regulating the organization of accounting.
Keeping of business ledgers shall be organized in such a manner as to allow:
1) Control of input data;
2) Control of accuracy of entered data;
3) Insight into the turnover and balance of the general ledger account;
4) Insight into the chronology of performed entry of business changes;
5) Preservation and use of data.
A legal person and a sole trader that process data on a computer shall use accounting software that enables the operation of internal accounting controls' system and prevents deletion of posted business changes.
Article 9*
Posting of business changes and events (hereinafter: business changes) in the accounts of assets, liabilities, equity and revenues and expenditures shall be performed on the basis of authentic accounting documents.
An accounting document shall constitute a written document or an electronic record of an occurred business change, that shall include all the data required for posting in the business ledgers, so that an accounting document may show unequivocally the basis, type and contents of a business change.
An accounting document shall be prepared in the required number of copies at the place and time of occurrence of a business change.
An accounting document that has been prepared in a single copy may be dispatched if data contained in such document are always available.
A photocopy of an accounting document shall constitute the basis for posting of a business change, provided that it states the location where the original document is stored and that it is confirmed by the responsible person who by his/her signature or other identification mark, confirms its authenticity.
A document that is dispatched i.e. received via telecommunication systems, as well as any document sent i.e. received via the Electronic Data Interchange service (EDI) shall also be regarded as an accounting document.
The sender shall be responsible for ensuring that the data that enters a telecommunications system is based on accounting documents, as well as for the safe-keeping of original accounting documents.
In the cases where an accounting document is transmitted via the Electronic Data Interchange service, the provider of an electronic data interchange service shall ensure the integrity of exchanged data.
Responsibility for Accounting Documents
Article 10
A person that prepares an accounting document shall be responsible for authenticity and completeness of data in the document, for its accuracy of calculation and for its truthful representation of the occurred business change.
The person referred to in paragraph 1 of this Article shall, by their signature, i.e. by other identification mark (as determined by a bylaw whereby the legal person, i.e. the sole trader regulates the organization of accounting) confirm the accuracy of calculation and authenticity of the accounting document.
The accounting document, which is prepared as an electronic record, shall contain the signature or other identification mark of the responsible person, i.e. of the person authorized for issuing of the accounting document, i.e. the electronic signature in compliance with the law.
The legal person, i.e. the sole trader shall, prior to entering the data from the accounting document into the business ledgers, designate the responsible person that should perform the control of authenticity of the document. The responsible person shall, by means of the signature, i.e. another identifying mark (as determined by the bylaw whereby the legal person, i.e. the sole trader regulates the organization of accounting) confirm that accounting document is authentic (complete, true, accurately computed and that it accurately presents the business change).
The control of accounting documents may not be carried out by persons who are in charge of material items (valuables) to which such documents relate.
The legal person, i.e. the sole trader shall take all the measures necessary so as that the accounting documents are protected from loss, damage and modifications and should ensure that the required technical equipment, data carriers and software are protected from abuse.
Time Limits for Delivery of Accounting Documents and Time Limits for Posting
Article 11
The accounting document shall, following its preparation with the legal person, i.e. sole trader or the receipt thereof by other persons, be delivered for posting within five business days from the date of occurrence of the business change at the latest, i.e. within five business days from the date of receipt (the control of authenticity of the accounting document must be performed within the abovementioned time limit as well).
The persons who keep business ledgers shall be required to, after having performed control of accounting documents received, post the accounting documents in business ledgers within five business days from the date of receipt thereof at the latest.
III BUSINESS LEDGERS AND CHART OF ACCOUNTS
Article 12
Business ledger shall be constitute uniform records of the balance and changes in assets, liabilities and equity, revenues and expenditures and off-balance sheet assets and liabilities of legal persons and sole traders.
The business ledgers shall be a journal, a general ledger and subsidiary ledgers.
The journal and the general ledger shall be maintained in accordance with the double-entry bookkeeping system.
A journal shall be understood to mean a book of account which is a chronological record of occurred business changes.
A journal may be maintained as a single book of account or as several books of account intended for business changes of specific balance sheet or off-balance sheet items.
The general ledger shall be understood to mean the complete set of balanced accounts for systematic coverage of the balance and changes relating to assets, liabilities, equity, revenues and expenditures, and which serves as the basis for the preparation of financial statements. A general ledger shall consist of two separate parts, namely: balance sheet records and off-balance sheet records.
The general ledger should include the accounts determined in the chart of accounts, in accordance with the needs of the legal person, i.e. sole trader.
The subsidiary ledgers shall be understood to mean analytical records and other subsidiary ledgers (a cash receipts journal and other subsidiary ledgers). Legal persons, i.e. sole traders may keep the analytical records separately for different types of funds and liabilities: for intangible assets, immovable property, plants and equipment, investment immovable property, long-term financial investments, supplies, receivables, operating liabilities, debts for loans and other items relating to balance sheet items.
Subsidiary ledgers relating to material property shall be reported in quantities and monetary amounts.
The business changes occurring on the basis of cash and other valuables kept in the cash register of a legal person and sole trader shall be entered into a cash register journal. The cash register journal shall be closed at the end of each business day and delivered for control and following that for posting thereof, and at the latest on the following business day.
Method of Maintaining Business ledgers
Article 13
Data shall be entered into business ledgers on the basis of accounting documents.
Business ledgers shall be maintained in conformity with the principle of immutable record of a business change that has occurred.
Business ledgers shall be maintained in such a manner as to enable control of input data, accuracy of entered data, storage of data, possibility to use data, possibility to inspect turnover and balances on accounts in the general ledger and subsidiary ledgers, i.e. transactions, as well as the possibility to inspect the chronology of previously entered business changes (date of posting).
Business ledgers shall be maintained for a financial year that corresponds to the calendar year, except in the case where business ledgers are maintained for a financial year that does not correspond to the calendar year in compliance with this Law.
By way of exception from paragraph 4 of this Article, a financial year may be shorter than 12 consecutive calendar months, in a case of incorporation of a legal person, i.e. sole trader, a status change, liquidation, bankruptcy, beginning of implementation of a financial year that is different from the calendar year and in other cases in compliance with the law.
Business ledgers may be kept in loose sheets, bound or transferred into an electronic or magnetic medium, so that, when necessary, they can be printed or displayed on a screen.
Opening of business ledgers shall be performed at the beginning of a financial year on the basis of the previous year's closing statement of balance.
The newly incorporated legal persons and sole traders shall open their business ledgers on the basis of an initial statement of balance that is prepared on the basis of an inventory of assets and liabilities, as at the date of entry into the register maintained by the Agency i.e. other competent authority.
Article 14
Legal persons and sole traders shall post the business changes in the accounts prescribed by the chart of accounts and, where applicable, in the accounts generated by separation of accounts prescribed in the chart of accounts.
The chart of accounts and the contents of the accounts within the chart of accounts shall be prescribed by:
1) Minister in charge of finance - for companies, cooperatives and sole traders;
2) Minister in charge of finance - for other legal persons referred to in Article 2, item 2) of this Law;
3) National Bank of Serbia - for the National Bank of Serbia, banks, insurance companies, providers of financial lease, voluntary pension funds and companies for voluntary pension fund management, in compliance with this Law and other laws regulating business operations of these financial institutions, which are, in compliance with the law, monitored by the National Bank of Serbia;
4) Securities Commission - for the Central Securities, Depository and Clearing House, investment funds and companies for investment fund management, as well as for the stock exchanges and broker-dealer companies.
Persons that Maintain Business ledgers and Prepare Financial Statements
Article 15
A legal person, i.e. a sole trader shall regulate by bylaw the educational attainment, professional experience and other conditions that the person responsible for maintaining business ledgers and preparation of financial statements need to comply with.
Entrusting Maintenance of Business ledgers and Preparation of Financial Statements to another Legal person, i.e. Sole trader
Article 16
A legal person i.e. a sole trader may entrust maintenance of business ledgers and preparation of financial statements, by means of a contract concluded in conformity with the law, to a legal person or a sole trader that is entered in the Register of providers of accounting services.
By way of exception from paragraph 1 of this Article, related legal persons may entrust maintenance of business ledgers and preparation of financial statements to their related legal person.
The provisions of paragraphs 1 and 2 of this Article shall not apply to the National Bank of Serbia, banks, insurance companies, providers of financial lease, voluntary pension funds, companies for voluntary pension fund management, investment funds, companies for investment fund management, Central Securities, Depository and Clearing House, stock exchanges, broker-dealer companies, factoring companies, payment institutions and electronic money institutions.
The legal person, i.e. sole trader with a registered predominant business activity for provision of accounting services shall designate by means of an internal decision a person that shall be responsible for maintenance of business ledgers and preparation of financial statements for each individual client to which services of maintenance of business ledgers and preparation of financial statements are provided.
A person finally convicted to an imprisonment sanction for a criminal offence in the Republic of Serbia or a foreign country may not perform the activities of maintenance of business ledgers and preparation of financial statements referred to in paragraph 4 of this Article, in compliance with this Law and perform other activities in the field of accounting, determined by this Law.
Register of Providers of Accounting Services
Article 17
The Register of Providers of Accounting Services (hereinafter: the Register) shall be maintained by the Agency.
The Agency shall maintain the Register referred to in paragraph 1 of this Article as an entrusted task.
The Register referred to in paragraph 1 of this Article shall be maintained in Serbian language.
The Register referred to in paragraph 1 of this Article shall be regularly updated and published on the website of the Agency.
The Register referred to in paragraph 1 of this Article shall be a public record.
The method of maintenance and the contents of the Register shall be prescribed by the Minister in charge of finance, at the proposal by the Agency.
The Agency shall maintain the Register through a registrar appointed in compliance with the law regulating operation of the Agency.
The Agency shall report at least once a year to the National Accounting Commission on the issues relating to the maintenance of the register referred to in paragraph 1 of this Article.
Processing of data in the Register referred to in paragraph 1 of this Article shall be carried out in compliance with the law that regulates protection of personal data.
Issuance of License and Entry into Register
Article 18
A legal person, i.e. sole trader that holds the license for provision of accounting services issued in compliance with this Law can be entered in the Register.
The license referred to in paragraph 1 of this Article shall be issued to a legal person by means of a decision by the Chamber of Certified Auditors (hereinafter: the Chamber) on condition that:
1) It is registered for the provision of accounting services as the predominant activity;
2) The founder, i.e. the beneficial owner, as well as a member of a management body of the legal person that has the provision of accounting services registered as their predominant activity, has not been convicted by a final judgment of a criminal offence within the meaning of the law regulating liability of legal persons for criminal offences, i.e. where the founder, i.e. the owner, as well as the member of the management body of the legal person is a natural person, that he/she has not been finally convicted of the criminal offences referred to in paragraph 6, item 2) of this Article;
3) Employs with full working hours at least one employee that holds a professional title in the field of accounting or auditing, acquired with a professional organization that is a member of the International Federation of Accountants.
A legal person that is registered for the provision of accounting services as their predominant activity, a founder i.e. a beneficial owner, as well as a member of the management body of that company may not be a legal person, an associate of the legal person or a legal person related to that legal person in compliance with the law, that has been convicted by a final judgment for a criminal offence, within the meaning of the law regulating liability of legal persons for criminal offences, i.e. a natural person who has been convicted by means of a final judgment of the criminal offences referred to in Article 16, paragraph 5 of this Law.
By way of exception from paragraph 2 of this Article, at the request of an audit firm, the license referred to in paragraph 1 of this Article shall be issued ex officio on the basis of a decision on issuance of a license for carrying out audit that was issued in compliance with the law regulating auditing.
A sole trader holding a license for the provision of accounting services issued in compliance with this Law can be entered in the Register.
The license referred to in paragraph 5 of this Article shall be issued by means of a decision by the Chamber to a sole trader, on condition that:
1) He/she is registered for the provision of accounting services as the predominant activity;
2) He/she has not been finally convicted within the meaning of Article 16, paragraph 5 of this Law;
3) He/she employs with full working hours at least one employee that holds a professional title in the field of accounting or auditing, which has been acquired with a professional organization that is a member of the International Federation of Accountants or where the sole trader himself/herself fulfils this criterion.
A sole trader registered for the provision of accounting services as the predominant activity, or sole trader’s associate, may not be a person that has been finally convicted of the criminal offences referred to in Article 16, paragraph 5 of this Law.
The associate referred to in paragraphs 3 and 7 of this Article shall be considered to be:
1) Every natural person holding a management position with a legal person in which he/she is the founder, owner or the responsible person with the legal person that is registered for the provision of accounting services as the predominant activity or a sole trader referred to in paragraph 6 of this Article that holds a management position or is the beneficial owner of that legal person;
2) Every natural person who is the beneficial owner of the legal person in which he/she is the founder, the owner or the responsible person with the legal person that is registered for the provision of accounting services as the predominant activity or a sole trader referred to in paragraph 7 of this Article holding a management position;
3) Every natural person who with a founder, owner and the responsible person of a legal person that is registered for the provision of accounting services as the predominant activity or with a sole trader referred to in paragraph 7 of this Article, is the beneficial owner of the same legal person.
A natural person may not be the founder, i.e. the beneficial owner or a member of the management body of the legal person that is registered for the provision of accounting services as the predominant activity, i.e. may not be the sole trader that is registered for the provision of accounting services as the predominant activity if he/she has committed a severe breach or repeated a breach of the regulation governing prevention of money laundering and financing of terrorism during the term of the imposed protective measure comprising of the ban on conducting certain activities that constitute the predominant activity of the economic operator that provides accounting services or during the term of the protective measure comprising of the ban imposed against the responsible person on conducting certain tasks that make the predominant activity of the economic operator that provides accounting services, i.e. during the term of the imposed protective measure comprising of the ban for the responsible person on conducting certain duties, with the legal person whose predominant activity is provision of accounting services.
The member of the management body referred to in paragraph 2, item 2), paragraph 3 and paragraph 9 of this Article shall mean a director, i.e. an executive director within the meaning of the law regulating companies.
The legal person that is submitting an application for issuance of the license referred to in paragraph 1 of this Article shall prove the identity of the beneficial owner of that legal person, in the manner and within the meaning of the law regulating the central records of beneficial owners.
The application for issuance of the license referred to in paragraph 1 of this Article shall be submitted to the Chamber.
The decisions referred to in paragraphs 2 and 6 of this Article shall be final. Administrative dispute proceedings can be initiated against the decision.
In the decision making process, provisions of the law regulating general administrative procedure shall be applied, unless where regulated otherwise by this Law.
The Chamber shall, ex officio, without delay deliver to the Agency a copy of the decision on issuance of a license, for the purpose of entry thereof in the Register.
The form and the contents of the application for issuance of the license referred to in paragraph 12 of this Article, as well as the fee for license issuance shall be prescribed by the Chamber, with a prior consent from the Ministry, which shall, prior to granting the consent, acquire the opinion of the National Accounting Commission.
The Chamber shall, at least twice a year, report to the National Accounting Commission and to the Ministry of Finance on the issues relating to the issuing and revoking of licenses for the provision of accounting services.
The legal persons, i.e. sole traders that are registered for the provision of accounting services as the predominant activity shall notify the Agency of the changes of all the facts and circumstances on the basis of which they have been entered in the Register, within eight days from the date of the occurrence of changes.
Where due to some duly justified reasons proof of non-conviction referred to in paragraphs 3 and 7 of this Article cannot be acquired, the person referred to in paragraphs 1 and 8 of this Article may make a declaration under penalty of perjury that he/she has not been convicted. The Chamber may, at any given moment, request that the persons referred to in paragraphs 1 and 8 of this Article provide proof of non-conviction, or request such proof directly from the competent authority.
In order to verify compliance with the prescribed conditions for granting licenses for provision of accounting services, the Chamber may, at any given moment, acquire data on convictions, i.e. on non-conviction of the persons referred to in paragraphs 3 and 7 of this Article in relation to which compliance with these conditions is to be verified including their associates from the criminal records maintained in accordance with the law.
Revocation of License and Deletion from Register
Article 19
A legal person, i.e. sole trader shall have its license for provision of accounting services revoked by means of a decision, if:
1) It ceases to comply with the conditions for issuing of the license referred to in Article 18 of this Law;
2) The license referred to in Article 18 of this Law has been issued on the basis of false data;
3) It passes a decision to windup such activity or ceases to exist as a legal person, i.e. sole trader in compliance with the law;
4) It acts contrary to the regulations governing prevention of money laundering and financing of terrorism - at a duly reasoned proposal by the authority competent for implementation of the regulations on prevention of money laundering and financing of terrorism.
The decision referred to in paragraph 1 of this Article shall be passed by the Chamber.
The decision referred to in paragraph 1 of this Article shall be final. Administrative dispute proceedings can be initiated against the decision.
In the decision making process, provisions of the law regulating general administrative procedure shall be applied, unless where regulated otherwise by this Law.
The Chamber shall ex officio, without delay, deliver to the Agency a copy of the decision on revocation of a license referred to in paragraph 2 of this Article, for the purpose of deletion thereof from the Register.
IV INVENTORY OF ASSETS, LIABILITIES, OFF-BALANCE SHEET ASSETS AND OFF-BALANCE SHEET LIABILITIES
Article 20
At the beginning of its business operations, a legal person i.e. a sole trader shall take an inventory of assets, liabilities and off-balance sheet assets and off-balance sheet liabilities, indicating the individual values in terms of quantities and monetary amount.
A legal person i.e. a sole trader shall take an inventory of assets and liabilities and reconcile book value with inventory value as at the balance sheet date.
The reconciliation of turnover and general ledger balance with the journal and of the subsidiary ledgers with the general ledger shall be performed prior to inventory of assets and liabilities and prior to preparing the annual financial statements.
A legal person i.e. a sole trader may also provide in a bylaw for longer periods for the taking of inventories of ledgers, films, archival material and the similar, provided that such periods may not be longer than five years.
The method and time limits for taking inventory and reconciling the book value with the actual condition shall be prescribed by the Minister in charge for finance.
Additional Obligation to Take Inventory
Article 21
In addition to inventory of assets and liabilities referred to in Article 20 of this Law, a legal person i.e. a sole trader shall also take inventory and reconcile balances in the event of handover of accountant duties, changes in the selling prices of products and goods in a retail store, a status change, opening, i.e. closing of a legal person’s i.e. a sole trader’s bankruptcy and liquidation procedure, as well as in other cases as envisage by the law.
Reconciliation of Receivables and Payables
Article 22
Legal persons and sole traders shall, prior to preparation of financial statements, reconcile their mutual receivables and payables, which shall be substantiated by means of an appropriate document.
A creditor shall, prior to preparing the financial statements, deliver to the debtor a list of outstanding liabilities.
The persons referred to in paragraph 1 of this Article shall respond to the request of a certified auditor for an independent confirmation of the status of receivables and payables.
All the legal persons and sole traders that prepare Notes to Financial Statements shall disclose in such statement in relation to the non-reconciled receivables and payables:
1) The number and the total amount of non-reconciled receivables and their proportion to the number and total amount of the receivables; and
2) The number and the total amount of non-reconciled payables and their proportion to the number and total amount of payables.
Article 23
The items that are presented in the regular and consolidated annual financial statements of legal persons and sole traders should be valued in conformity with the following general accounting principles:
1) Assumption that a legal person, i.e. sole trader operates continuously;
2) Accounting policies and bases for valuation are applied consistently from year to year;
3) Recognition and valuation is performed by applying the precautionary principle, and in particular:
(1) Only the profit generated up to the balance sheet date can be recognized;
(2) In the Balance Sheet, liabilities incurred during the current or previous years shall be presented, even where such liabilities become evident only in between the Balance Sheet date and the date of approval for disclosure of financial statements;
(3) All the impairments are taken into account, irrespective of whether the financial year resulted in profit or loss;
4) All revenues and expenditures that pertain to a financial year are taken into account, irrespective of the date of their collection i.e. payment;
5) Components of assets and components of liabilities are valued separately;
6) Offsetting between the items of assets and liabilities or between the items of revenues and expenditures is prohibited;
7) Opening balance for each financial year must be equal to the closing balance for the previous financial year;
8) Items of the Income Statement and those of the Balance Sheet are calculated and presented by taking into account the essence of the transaction in question or the deal in question;
9) Amounts recognized in the Balance Sheet and in the Income Statement shall be calculated on accrual basis by applying the matching principle of revenues and expenditures.
By way of exception from paragraph 1 of this Article, derogations from the general accounting principles shall be permitted only in cases of application of individual IFRS, i.e. IFRS for SMEs and such derogations, as well as the reasons for their occurrence, must be disclosed in the Notes to Financial Statements, including the assessment of their effects on the assets, liabilities, financial standing and profit or loss of the legal person, i.e. sole trader.
Where the application of the provisions of this Law, secondary legislation adopted on the basis of this Law, as well as the IFRS and IFRS for SMEs would not be sufficient to obtain a true and objective presentation of assets and liabilities, revenues, expenditures and results of the legal person, i.e. sole trader, the legal person, i.e. sole trader shall present, in the Notes to Financial Statements, additional information required for the compliance with that requirement.
Article 24
Large legal persons, legal persons that are required to prepare consolidated financial statements (the parent legal persons), public companies i.e. companies that are preparing to become public in compliance with the law regulating the capital market, irrespective of their size, shall apply IFRS in the recognition, valuation, presentation and disclosure of items in financial statements.
Article 25
Small and medium-sized legal persons shall apply IFRS for SMEs in the recognition, valuation, presentation and disclosure of items in financial statements.
By way of exception from paragraph 1 of this Article, small and medium-sized legal persons may decide to apply the IFRS in recognition, valuation, presentation and disclosure of items in financial statements.
In the case referred to in paragraph 2 of this Article, small and medium-sized legal persons shall apply IFRS continuously, i.e. for five years at the minimum from the beginning of application of IFRS, except in cases of opening of bankruptcy or liquidation proceedings.
Article 26
In recognition, valuation, presentation and disclosure of items in financial statements, micro legal persons and other legal persons referred to in Article 2, item 2) of this Law, irrespective of size, shall apply secondary legislation passed by the Minister in charge of finance, such legislation being based on the general accounting principles.
By way of exception from paragraph 1 of this Article, micro legal persons and other legal persons referred to in Article 2, item 2) of this Law, irrespective of size, may decide to apply IFRS or IFRS for SMEs in recognition, valuation, presentation and disclosure of items in financial statements.
In the case referred to in paragraph 2 of this Article, micro legal persons and other legal persons referred to in Article 2, item 2) of this Law, irrespective of size, shall apply IFRS, i.e. IFRS for SMEs continuously, i.e. for five years at the minimum from the beginning of application of IFRS, i.e. IFRS for SMEs, except in cases of opening of bankruptcy or liquidation proceedings.
VI CLOSING OF BUSINESS LEDGERS AND KEEPING OF ACCOUNTING DOCUMENTS, BUSINESS LEDGERS AND FINANCIAL STATEMENTS
Article 27
Business ledgers shall be closed following the posting of all business changes and calculations at the end of a financial year, as well as in cases of status changes, termination of operations and in other cases where the business ledgers need to be closed. Following the closing of business ledgers, no posting can be performed therein.
The accounts in subsidiary ledgers that have been used for more than one year shall be closed after the cessation of their use.
Business ledger shall be closed by the time limit for the submission of financial statements at the latest.
By way of exception from paragraph 3 of this Article, the National Bank of Serbia may prescribe time limits for closing of business ledgers for financial institutions which are supervised by it, in compliance with the law.
Keeping of Accounting Documents, Business ledgers and Financial Statements
Article 28
Legal persons and sole traders shall keep the accounting documents, business ledgers and financial statements in an orderly manner and to designate in their bylaws the persons responsible for their keeping and the business premises for those purposes, as well as the method of keeping.
Financial statements, reports on performed audit and the Statistical Report shall be kept for 20 years.
Annual business report shall be kept for 20 years from the last day of the financial year for which it has been prepared.
The journal and the general ledger shall be kept for ten years.
Subsidiary ledgers shall be kept for five years from the date of their closing.
Payroll sheets or analytical records of salaries shall be kept permanently.
Documents based on which data is entered in the business ledgers shall be kept for five years.
Five years shall be the time limit for keeping the documents pertaining to payment operations in financial institutions authorized for payment operations.
The time limits for keeping of accounting documents and business ledgers shall be counted from the last day of the financial year to which they relate.
Accounting documents, business ledgers and financial statements shall be kept in the original or by applying other means of filing, as determined by law.
Accounting documents may be stored on electronic media, as original electronic documents or digital copies, if access to data stored in such a manner is provided to the competent authority and if it is ensured:
1) That data contained in an electronic document or record is accessible and suitable for further processing;
2) That data are preserved in the form in which they were created, sent and received;
3) That the sender, receiver, time and place of sending and receiving can be determined from the preserved electronic message;
4) That the technologies and procedures are applied that provide for sufficient protection from modification or deletion of data or other reliable means whereby immutability of data or messages, as well as database backup at a different location are guaranteed.
Accounting documents, business ledgers and financial statements shall be kept on the business premises of the legal person, i.e. sole trader concerned, i.e. with the legal persons or sole traders entrusted with keeping of business ledgers.
In case that the business ledgers are maintained in a computer, along with the data stored, the legal person, i.e. the sole trader concerned must also provide for the storage of application software, so as to make such data accessible for control. In cases where the legal person, i.e. the sole trader cannot, due to the technical reasons, provide for the functionality of the stored application software used for entering, processing and storing of accounting data, it shall keep the document comprising data in the clear text format.
In addition to the documents referred to in paragraph 13 of this Article, the legal person, i.e. the sole trader shall provide a description of the fields themselves, as well as defining of designations that are separating one piece of data from another (data delimiter).
At the opening of a liquidation or bankruptcy proceedings, the accounting documents and business ledgers shall be submitted to the liquidator, i.e. bankruptcy administrator and this shall be stated in the records.
VII FINANCIAL STATEMENTS, ANNUAL BUSINESS REPORTS, NON- FINANCIAL REPORTING AND STATEMENTS OF PAYMENTS TO GOVERNMENTAL AUTHORITIES
Regular Annual Financial Statement
Article 29
Legal persons, i.e. sole traders shall prepare regular annual financial statements for the financial year that corresponds to the calendar year, in compliance with this Law and the secondary legislation adopted on the basis of this Law.
By way of exception from paragraph 1 of this Article, a subsidiary legal person with the seat in the Republic of Serbia whose foreign-based parent legal person adheres to a financial year that does not correspond to the calendar year, may prepare and publish regular annual financial statement with the balance as at the last day of the financial year that does not correspond with the calendar year, subject to the approval of the Minister in charge of finance, i.e. the Securities Commission in the case of legal persons under its competence. The subsidiary legal person shall apply the financial year that does not correspond to the calendar year continuously, and at least five years from the beginning of application of financial year that does not correspond to the calendar year.
In the decision making procedure of the Minister in charge of finance, i.e. of the Securities Commission referred to in paragraph 2 of this Article, provisions of the law regulating general administrative proceedings shall be applied, unless where regulated otherwise by this Law.
The exception envisaged in paragraph 2 of this Article may not be exercised by the banks, insurance companies, providers of financial lease, voluntary pension funds and companies for voluntary pension fund management, payment institutions and electronic money institutions which are, in compliance with the law, supervised by the National Bank of Serbia.
A regular annual financial statement of large legal persons, medium-sized legal persons, legal persons obliged to prepare consolidated annual financial statements (parent legal persons), public companies, i.e. companies preparing to become public, in compliance with the law regulating the capital market, irrespective of the size shall include:
1) Balance Sheet,
2) Income Statement,
3) Statement of other comprehensive income,
4) Statement of changes in equity,
5) Statement of cash flows and
6) Notes to Financial Statements.
A regular annual financial statement of legal persons and sole traders, except for the legal persons referred to in paragraphs 5 and 7 of this Article, shall include:
1) Balance Sheet,
2) Income Statement and
3) Notes to Financial Statements.
A regular annual financial statements of a sole trader and other legal persons, referred to in Article 2, item 2) of this Law, classified as micro legal persons shall include:
1) Balance Sheet and
2) Income Statement.
Legal persons whose business operations are regulated by other regulations, on the basis of which the authority, i.e. the organization competent for conducting supervision of their operations has prescribed the contents and the structure of annual financial statements, shall prepare the annual financial statements in compliance with this Law and those regulations.
A legal person shall prepare interim financial statements in cases envisaged by this Law. An interim financial statement shall include:
1) Balance Sheet and
2) Income Statement.
Competence for Prescribing of Contents and Shape of Forms for Financial Statements and Statistical Report
Article 30
The Minister in charge of finance shall prescribe the contents and the shape of forms for financial statements referred to in Articles 29 and 31 of this Law and of the Statistical Report referred to in Article 44, paragraph 3 of this Law for companies, cooperatives and sole traders.
The Minister in charge of finance shall prescribe the contents and the shape of forms for financial statements referred to in Articles 29 and 31 of this Law and of the Statistical Report referred to in Article 44, paragraph 3 of this Law for other legal persons referred to in Article 2, item 2) of this Law.
The National Bank of Serbia shall prescribe the contents and the shape of forms for financial statements referred to in Articles 29 and 31 of this Law and of the Statistical Report referred to in Article 44, paragraph 3 of this Law for the National Bank of Serbia, banks, insurance companies, providers of financial lease, voluntary pension funds and companies for voluntary pension fund management, in compliance with this Law and other laws regulating business operations of these financial institutions which are, in compliance with the law, supervised by the National Bank of Serbia.
The Securities Commission shall prescribe the contents and the shape of forms for financial statements referred to in Articles 29 and 31 of this Law and of the Statistical Report referred to in Article 44, paragraph 3 of this Law for the investment funds, companies for investment fund management, Central Securities, Depository and Clearing House and stock exchanges and broker-dealer companies.
Consolidated Annual Financial Statement
Article 31
Consolidated annual financial statements shall be prepared, delivered and disclosed by a legal person that is a parent legal person in an economic entity.
A parent legal person has control over the subsidiary legal person when it has over it:
1) Power;
2) It is exposed, or has rights to variable returns on the basis of its share in such subsidiary legal person;
3) It has ability to, by using its power, impact those returns in order to thus impact the amount of return that belongs to it.
The power of the parent legal person over the subsidiary legal person shall exist when it:
1) Holds the majority of shares or voting rights held by the members in that subsidiary legal person;
2) Has the right to appoint or dismiss the majority of the members of administrative, management or supervisory body of the subsidiary legal person, and is at the same time a shareholder or a member of that legal person;
3) Has the right to exercise predominant influence over the subsidiary legal person in which it is a shareholder or a member, in compliance with the contract concluded with that legal person or in compliance with the provisions of the instrument of incorporation or articles of association of such legal person; or
4) As a shareholder or a member of the legal person in compliance with the agreement with other shareholders or members of that legal person (the subsidiary legal person), independently controls the majority of shareholders or voting rights held by the members in the subsidiary legal person.
For the purposes of paragraph 3, items 1) and 4) of this Article, the total number of shareholders or voting rights held by the members in a subsidiary legal person shall be reduced by the voting rights associated with the shares held by the subsidiary legal person itself, a subsidiary legal person of that subsidiary legal person or a person acting in their own name, but for the benefit of these legal persons.
For determining the voting rights and rights to appoint and revoke the majority of the management body members in any subsidiary legal person owned by a parent legal person, the abovementioned rights shall be taken into account that are directly possessed by that parent legal person, but also the rights that the parent legal person possesses indirectly through its other legal persons or other related persons. The abovementioned rights shall be reduced by the rights:
1) Relating to the shares, i.e. stakes held for the benefit of a person that is neither a parent nor a subsidiary legal person of that parent legal person; or
2) Relating to the shares, i.e. stakes:
(1) That serve as a surety, on condition that such rights are used in compliance with the instructions received in relation to such surety; or
(2) That are linked to approval of a loan, as part of the usual business activities, on condition that the voting rights are exercised in the interest of the person that is providing surety.
The fact pertaining to the location of the seat of that subsidiary legal person (in the country or abroad) shall have no impact on the inclusion of the subsidiary legal person in the consolidated annual financial statement.
Consolidated annual financial statement shall be prepared with the same date as the regular annual financial statement of the parent legal person.
The consolidated annual financial statement shall include:
1) Consolidated Balance Sheet;
2) Consolidated Income Statement;
3) Consolidated Statement of other comprehensive result;
4) Consolidated Statement of changes in equity;
5) Consolidated Statement of cash flows;
6) Consolidated Notes to financial statements.
The parent legal person shall include the financial statements of its subsidiary legal persons in the consolidated annual financial statement.
Provisions on the financial statements referred to in Article 24 of this Law shall apply mutatis mutandis to recognition, valuation, presentation and disclosure of items in consolidated annual financial statement.
If the composition of a group of legal persons included in the consolidation has changed during a financial year, the consolidated annual financial statement should include information that enable comparison of consecutive consolidated annual financial statements of the group.
The obligation referred to in paragraph 11 of this Article shall be fulfilled by preparation of an adjusted comparative Balance Sheet and adjusted comparative Income Statement and by their presentation in the Consolidated Notes to Financial Statements.
Article 32
Small groups shall be exempt from the obligation to prepare, deliver and disclose a consolidated annual financial statement, except where at least one member of the group is a public-interest undertaking.
Exemption from the obligation to prepare, deliver and disclose the consolidated annual financial statement shall apply also to a parent legal person that is at the same time a subsidiary legal person to its parent legal person (hereinafter: the owned parent legal person), including the public-interest undertaking, except in the case of a company whose securities are included in trading within the meaning of the regulation governing the capital market or of any Member State.
In order that an owned parent legal person be exempted from the obligation to prepare, deliver and disclose the consolidated annual financial statement, it shall be necessary that its parent legal person applies this Law or the law of the Member State and that:
1) The parent legal person of the owned parent legal person holds all the stakes or shares in the owned parent legal person. Stakes or share in the owned parent legal person held by the owned parent legal person itself, by members of its management bodies in compliance with the law or obligation under the incorporation instrument or articles of association of such legal person, shall not be taken into account for such purpose; or
2) The parent legal person of the exempted owned parent legal person holds 90 per cent or more stakes or shares in the exempt owned parent legal person, and the remaining shareholders or members of the exempted owned parent legal person have agreed in writing that such owned parent legal person shall not prepare consolidated annual financial statements.
The exemptions referred to in paragraph 3 of this Article can be applied when the following conditions are fulfilled:
1) The annual financial statements of the exempted owned parent legal person and the financial statements of all its subsidiary legal persons that it would otherwise include in its consolidated annual financial statement are consolidated in the financial statement of a larger group of legal persons whose parent legal person is subject to application of this Law;
2) The annual financial statements of the exempted owned parent legal person and the financial statements of all its subsidiary legal persons that it would otherwise include in its consolidated annual financial statement are consolidated in the financial statement of a larger group of legal persons whose parent legal person is subject to application of the law of a Member State;
3) The consolidated annual financial statement referred to in items 1) or 2) of this paragraph and the consolidated annual business report of the larger group of legal persons are prepared by the parent legal person of that group, in compliance with this Law;
4) The consolidated annual financial statement referred to in items 1) or 2) of this paragraph and the consolidated annual business report of a larger group of legal persons are prepared by the parent legal person of that group, in compliance with IFRS;
5) The exempted owned parent legal person publishes the following documents in the manner prescribed for the delivery of documentation enclosed with the financial statements in compliance with Article 45 of this Law:
(1) The consolidated annual financial statement and the consolidated annual business report referred to in item 3) of this paragraph; or
(2) The consolidated annual financial statement and the consolidated annual business report referred to in item 4) of this paragraph; and
(3) The audit report;
6) The exempted owned parent legal person has disclosed in the Notes to Financial Statements within its regular annual financial statement:
(1) The name and the seat of the parent legal person that is preparing the consolidated annual financial statement referred to in item 3), i.e. item 4) of this paragraph and
(2) The exemption from the obligation to prepare the consolidated annual financial statement and the consolidated annual business report, with the explanation of the reason for such exemption.
In the case where the exempted owned parent legal person publishes consolidated annual financial statement and consolidated annual business report referred to in paragraph 4, item 4) of this Article, it shall be obliged to publish the aforementioned reports translated into Serbian language.
The parent legal person shall not be obliged to include in the consolidated annual financial statement the subsidiary legal person, including the public-interest undertaking, if at least one of the following conditions is fulfilled:
1) In the case where information required for preparation of consolidated annual financial statement in compliance with this Law is not available without excessive costs or excessive delay;
2) The shares, i.e. stakes of that subsidiary legal person are held exclusively with the aim of their subsequent sale - the parent legal person can prove that it is actively working on the sale of such shares, i.e. stakes; or
3) There are important long-term limitations that are significantly obstructing:
(1) The parent legal person from exercising its rights over property or in managing such subsidiary legal person; or
(2) Realization of single management of such subsidiary legal person.
A parent legal person, including a public-interest undertaking, shall be exempted from the obligation to prepare, deliver and disclose the consolidated annual financial statement if:
1) It has only the subsidiary legal persons that are, either individually or as a consolidated sum, from the aspect of preparation of consolidated annual financial statement, materially insignificant; or
2) All its subsidiary legal persons may be exempted from consolidation based on paragraph 6 of this Article.
Auditing of Financial Statements
Article 33
Auditing of regular annual and consolidated annual financial statements shall be carried out in compliance with the regulations governing auditing.
The audit firm shall additionally:
1) Provide an opinion on:
(1) Whether the annual business report is in line with the regular annual financial statement for the same business year; and
(2) Whether the annual business report has been prepared in compliance with the applicable legal provisions;
2) Prepare a statement, in the sense of whether based on the knowledge and understanding of the legal person and its environment acquired during auditing, it has determined any materially significant incorrect statements in the annual business report and point out the nature of such statements.
Provisions of paragraph 2 of this Article shall apply mutatis mutandis to the consolidated annual financial reports and to the consolidated annual business reports.
Article 34
A legal person shall prepare an annual business report, which includes an objective overview of development and results of their business operations and position, together with a description of principal risks and uncertainties to which it is exposed.
The annual business report should provide a comprehensive analysis of the development and results of business operations of the legal person and of its position, in compliance with the scope and complexity of business operations.
The analysis of the development and results of business operations of the legal person and of its position referred to in paragraph 2 of this Article should include financial and, where necessary, key non-financial performance indicators that are of relevance for the particular activity, including information pertaining to the environmental and personnel matters. Within the analysis, the annual business report shall include a reference to the amounts presented in the regular annual financial statement and additional explanations of such amounts.
The annual business report shall include:
1) A brief description of business activities and organizational structure of the legal person;
2) A credible account of the development, financial position and operating results of the legal person, including the financial and non-financial indicators relevant for the particular type of business activity, as well as information on personnel matters;
3) Information on investments aimed at environmental protection;
4) All significant events upon the end of the financial year;
5) Planned future development;
6) Research and development activities;
7) Information on the buy-back of own shares, i.e. stakes;
8) Existence of branches;
9) Which financial instruments it uses, if this is relevant for the assessment of financial position and operational performance;
10) Objectives and policies tied to financial risk management, together with the protection policy for all major kinds of planned transactions for which protection is being used;
11) Exposure to price risk, credit risk, liquidity risk and cash flow risk, a strategy for managing these risks and an assessment of their effectiveness.
By way of exception from paragraph 1 of this Article, micro and small legal persons, unless they are public-interest undertakings, shall not be obliged to prepare annual business report, but they shall present information on the buy-back of own shares, i.e. stakes in the Notes to Financial Statements.
Corporate Governance Statement
Article 35
A corporate governance statement is an integral part of the annual business report of public companies, i.e. of the companies preparing to become public in compliance with the law regulating the capital market.
A corporate governance statement shall include at least the following information:
1) A reference to:
(1) The rules of corporate governance to which the legal person is subject;
(2) The rules of corporate governance that the legal person has voluntarily decided to apply;
(3) All relevant information about the practice of corporate governance that is exceeding the requirements of national law;
2) A description of basic elements of the system of internal controls and mitigation of risks of a legal person in relation to the procedure of financial reporting;
3) Information on takeover bids where the company is a reporting entity bound to apply regulations governing the takeover of companies:
(1) On direct or indirect participation in equity acquired (including indirect participation in that equity through pyramid structures and cross-shares);
(2) Holders of any securities with special control rights and a description of these rights;
(3) All restrictions of voting rights, such as the restrictions of voting rights of the holders of a specific percent or number of shares, time limits for exercising of voting rights and reasons due to which, with cooperation of legal persons, the financial rights arising from the securities are separated from holding of these securities;
(4) Rules applicable to appointment and revocation of the management members of the legal person and change of articles of association or instrument of incorporation;
(5) Authorizations of the legal person's management members and particularly the authorizations in the field of issuing or buy-back of securities;
4) Composition and operation of the management bodies and their boards;
5) A description of the diversity policy applied in relation to the management bodies of the legal person with regard to the aspects such as, for instance, age, gender, or educational and professional backgrounds, as well as stating the objectives of that diversity policy, how it has been implemented and the results in the reporting period. Where such policy is not implemented, the report must include an explanation as to why this is the case (information requested by this item shall not be requested from the small and medium-sized legal persons).
The audit firm shall express the opinion in compliance with Article 33 of this Law in relation to information presented in compliance with paragraph 2, items 2) and 3) of this Article and shall check whether data from paragraph 2, items 1), 4) and 5) of this Article has been delivered.
When referring to the rules of corporate governance referred to in paragraph 2, item 1) sub-items (1) or (2) of this Article, the legal person shall indicate the place where such rules are publicly available. When referring to information referred to in paragraph 2, item 1), subitem (3) of this Article, the legal person should ensure that the corporate governance practice is publicly available.
The corporate governance statement referred to in paragraph 1 of this Article shall be delivered by public-interest undertakings that are joint-stock companies and limited liability companies within the meaning of the law regulating companies.
Consolidated Annual Business Report
Article 36
An obligation to prepare a consolidated annual business report belongs to a parent legal person which, according to Article 31 of this Law is subject to obligation to prepare consolidated annual financial statement.
The consolidated annual business report shall contain information requested in Article 34 and, where applicable, Articles 35, 38 and 40 of this Law.
The reporting entity for preparation of consolidated annual business reports shall adapt information requested in the provisions of Articles 34 and 35 of this Law:
1) When reporting on the details of acquired own shares in the consolidated annual business report, it shall state the number and the nominal value or, where there is no nominal value, the book value of all the shares of the parent legal person held by such parent legal person, subsidiary legal persons of such parent legal person or the persons acting in their own name and for the benefit of these legal persons;
2) In the corporate governance statement, when reporting on the systems of internal control and risk management, it shall state the basic characteristics of the systems of internal control and risk management for the legal persons that are included as a whole in the consolidated financial statements.
Article 37
The reporting entities for non-financial reporting are large legal persons that are public-interest undertakings which on the balance sheet date exceed the criterion of the average number of 500 employees during a financial year.
By way of exception from paragraph 1 of this Article, a legal person that is a subsidiary legal person shall not be a reporting entity for non-financial reporting if that legal person is, inclusive of its subsidiary legal persons, included in the consolidated annual business report prepared in compliance with this Article and Article 36 of this Law.
The legal person referred to in paragraph 1 of this Article shall include in the annual business report a non-financial statement containing information necessary for understanding of the legal person's development, operating performance and position, as well as of the results of its activities minimally relating to environmental protection, social and employee matters, respect for human rights, fight against corruption and matters relating to bribery, including:
1) A brief description of the business model of the legal person;
2) A description of the policies pursued by the legal person in relation to those matters, including the procedures of the basic analysis which is implemented;
3) Results of these measures;
4) Principal risks tied to those matters relating to the legal person's business operations including, where relevant and necessary, its business relationships, products or services which may cause adverse results in those areas, as well as the manner in which the legal person manages those risks;
5) Key non-financial performance indicators relevant to the particular business.
Where a legal person does not implement the measures related to one or more of the matters referred to in paragraph 3 of this Article, it shall provide reasons for not doing so in the non-financial statement.
The reporting entity for non-financial reporting shall include in the non-financial statement, where necessary, references to the amounts reported in the annual financial statement as well as additional explanations of these amounts.
Exceptionally, a reporting entity for non-financial reporting may omit from the non-financial statement the information on impending events or matters in the course of its negotiations with other persons where, in compliance with the duly reasoned opinion of the members of management bodies that are having collective responsibility for that opinion, the disclosure of such information could cause harm to the commercial position of the legal person, provided that such omission does not prevent a fair and objective understanding of the legal person's development, operating performance and position, as well as the results of its activities.
Upon fulfillment of the obligation referred to in paragraph 3 of this Article, it shall be considered that the legal person has also fulfilled the obligation relating to the analysis of non-financial information referred to in Article 34, paragraph 4, item 2) of this Law.
The reporting entity for auditing of regular annual financial statements shall obtain a confirmation from the audit firm with which it has contracted auditing of its regular annual financial statements that the non-financial report has been prepared in compliance with the provisions of this Article.
The provision of paragraph 1 of this Article shall not apply to the National Bank of Serbia.
Consolidated Non-financial Reporting
Article 38
The reporting entity for consolidated non-financial reporting is a legal person in a group that is classified as large and that on the balance sheet date, on a consolidated basis, exceeds the criterion of the average number of 500 employees during the financial year.
The legal person referred to in paragraph 1 of this Article shall include the consolidated non-financial statement in the consolidated annual business report.
By way of exception from paragraph 1 of this Article, the parent legal person that is at the same time a subsidiary legal person shall not be a reporting entity for the consolidated non-financial reporting if such exempt owned parent legal person and its subsidiary legal persons are included in the consolidated annual business report prepared in compliance with this Article and Article 36 of this Law.
The legal person referred to in paragraph 1 of this Article shall include in its consolidated annual business report the consolidated non-financial reporting that includes information necessary for understanding of the development, operating performance, position of the group, as well as the results of its own activities which minimally relate to environmental, social and employee matters, respect for human rights, fight against corruption and matters relating to bribery, including:
1) A brief description of the group's business model;
2) A description of the policies pursued by the group in relation to those matters, including the procedures of basic analysis implemented;
3) Results of these measures;
4) Principal risks tied to those matters related to the group's operations including, where relevant and necessary, its business relationships, products or services which are likely to cause adverse results in those areas, as well as the manner in which the group manages those risks;
5) Non-financial key performance indicators relevant to the particular business.
Where the group does not implement the measures tied to one or more of the matters referred to in paragraph 4 of this Article, the consolidated non-financial statement shall provide reasons for their non-implementation.
The consolidated non-financial statement shall, where necessary, include references to amounts reported in consolidated annual financial statement, as well as additional explanations of these amounts.
Exceptionally, a group that is a reporting entity for non-financial reporting, may omit from the consolidated non-financial statement the information on impending events or matters in the course of its negotiations with other persons where, in compliance with the duly reasoned opinion of the members of management bodies that are bearing the collective responsibility for that opinion, the disclosure of such information could seriously harm the commercial position of the group (or some of the group's members), provided that such omission does not prevent a fair and objective understanding of the group's development, operating performance and position, as well as the results of its activities.
Upon fulfillment of the obligation referred to in paragraph 4 of this Article, it shall be considered that the legal person has also fulfilled the obligation related to the analysis of non-financial information referred to in Article 34, paragraph 4, item 2) and Article 36 of this Law.
The reporting entity for auditing of consolidated annual financial statements shall obtain a confirmation from the audit firm with which it has contracted auditing of its consolidated annual financial statements that the consolidated non-financial statement has been prepared in compliance with the provisions of this Article.
Report on Payments to Governmental Authorities
Article 39
Public-interest undertakings operating in extractive industry or cutting of primary forests shall prepare and publish a report on payments to governmental authorities on annual basis.
The legal person referred to in paragraph 1 of this Article shall include the report on payments to governmental authorities in the annual business report.
By way of exception, a parent or subsidiary legal person shall not be obliged to prepare the report referred to in paragraph 1 of this Article if the following conditions are fulfilled:
1) The parent legal person is a reporting entity under this Law;
2) The parent legal person is subject to a Member State law;
3) Payments to the governmental authorities effectuated by the legal person have been included in the consolidated report on payments to governmental authorities that has been drafted by such parent legal person in compliance with Article 40 of this Law.
Payments amounting to less than EUR 100,000 in Dinar counter value in a financial year, within the meaning of Article 6, paragraph 7 of this Law, irrespective of whether these are effectuated as a one-off payment or as a series of related payments, need not be presented in the report referred to in paragraph 1 of this Article.
The following pieces of information shall be disclosed in the report referred to in paragraph 1 of this Article for each financial year:
1) Total amount of payment effectuated to all governmental authorities;
2) Total amount according to the type of payments, as defined in Article 2, item 35) of this Law effectuated to all governmental authorities;
3) In the case where such payments are related to a certain project, the total amount per the type of payments, as defined in Article 2, item 35) of this Law, paid for each one of such projects and the total amount of payments for each one of such projects.
Payments that the legal person has effectuated for the liabilities imposed on the level of the legal person may be disclosed on such level and not on the level of the project.
If payments to the governmental authorities have been made in kind, they shall be reported upon according to the value and where necessary according to the volume, with additional notes on the method used to determine their value.
Publication of payments referred to in this Article shall reflect the substance and not the type of actual payment or activity concerned.
Payments and activities may neither be divided nor merged, for the purpose of avoiding the application of provisions of this Law.
The members of management bodies of the legal person shall ensure that, to the best of their knowledge and abilities, the report on payments to the governmental authorities is prepared and published in compliance with this Law.
Consolidated Report on Payments to Governmental Authorities
Article 40
Public-interest undertakings that are, as parent legal persons, obliged to prepare a consolidated annual financial statement and that are active in extractive industry or cutting of primary forests shall prepare a consolidated report on payments to governmental authorities in compliance with the requirements referred to in Article 39 of this Law.
The legal person referred to in paragraph 1 of this Article shall include the consolidated report on payments to governmental authorities in the consolidated annual business report.
The parent legal person within the meaning of this Law is active in extractive industry or cutting of primary forests if it or any one of its subsidiary legal persons is active in extractive industry or cutting of primary forests.
The consolidated report on payments to governmental authorities shall include only the payments that are consequences of extractive activities i.e. activities relating to cutting of primary forests.
The obligation to prepare the consolidated report referred to in paragraph 1 of this Article shall not apply to:
1) Parent legal person of a small group, except where a related legal person is a public-interest undertaking;
2) Parent legal person of a medium-sized group, except where a related legal person is a public-interest undertaking;
3) Parent legal person which is subject to this Law, and which is at the same time a subsidiary legal person, in case where its parent legal person is also subject to this Law; and
4) Parent legal person which is subject to this Law, which is at the same time a subsidiary legal person, in case where its parent legal person is subject to a Member State law.
It shall not be necessary to include information on business operations of a subsidiary legal person, including a public-interest undertaking, in the consolidated report on payments to governmental authorities in case where at least one of the following conditions is fulfilled:
1) Significant long-term restrictions are significantly obstructing the parent legal person from exercising its rights on property or management of such legal person;
2) Exceptionally rare cases where information needed for preparation of consolidated report on payments to governmental authorities in compliance with this Law is not available without excessive costs or excessive delay;
3) Shares, i.e. stakes of such subsidiary legal person are held exclusively with the aim of their subsequent sale (the parent legal person can prove that it is actively working on the sale of such shares, i.e. stakes).
The exceptions referred to in paragraph 6 of this Article shall apply only if also used for the purposes of consolidated annual financial statements.
The members of management bodies of the legal person shall ensure that, to the best of their knowledge and abilities, the consolidated report on payments to the governmental authorities is prepared and published in compliance with this Law.
Combining of Annual Business Report with Consolidated Annual Business Report in a Single Report
Article 41
The parent legal persons may decide to present the annual business report and the consolidated annual business report as a single report that should include information of significance for the economic entity.
In the case referred to in paragraph 1 of this Article, the parent legal person shall deliver to the Agency the decision of the competent body on combining of the annual business report with the consolidated business report in a single report.
Reporting Language and Currency
Article 42
Business ledgers, financial statements, annual business report, decision on the adoption of financial statements, auditor's report on completed audit of financial statements, statements of payments to governmental authorities, non-financial statements and other financial and non-financial information shall be prepared in Serbian language.
The amounts in business ledgers, financial statements, decisions, as well as other financial and non-financial information referred to in paragraph 1 of this Article, shall be expressed in the Dinars.
Adoption of and Responsibility for Financial Statements
Article 43
Financial statements shall be adopted by the general meeting or another competent body of the legal person, i.e. the sole trader.
A legal person’s legal representative, its management body, and supervisory body, in conformity with the law, i.e. a sole trader, as well as the responsible person referred to in Article 15 of this Law, i.e. the responsible person referred to in Article 16, paragraph 4 of this Law, acting within the competences assigned to them by the law and internal regulations of the legal person, i.e. sole trader, shall be collectively responsible for providing a true and fair view of:
1) The regular annual financial statement and annual business report;
2) The consolidated annual financial statement and consolidated annual business report.
The financial statements shall be signed by the legal representative of the legal person, i.e. the sole trader.
VIII DELIVERY OF FINANCIAL STATEMENTS
Delivery of Financial Statements for Public Disclosure
Article 44
Legal persons, i.e. sole traders shall deliver the regular annual financial statements for the reporting year to the Agency for the purpose of statistics and public disclosure no later than 31 March of the following year, except where regulated otherwise by a special law.
The legal persons, whose financial year does not correspond to the calendar year, shall deliver the regular annual financial statements for the reporting year to the Agency for statistical purposes and for public disclosure within three months from the balance sheet date at the latest.
The legal persons and sole traders shall deliver the Statistical Report to the Agency for statistical purposes, enclosed with the regular annual financial statements referred to in paragraphs 1 and 2 of this Article, within the time limits set in these paragraphs.
The legal persons that prepare consolidated annual financial statements (the parent legal persons) shall deliver the consolidated annual financial statements for the reporting year to the Agency, for public disclosure, no later than 30 April of the following year, except where regulated otherwise by a special law.
The legal persons, i.e. sole traders that prepare interim financial statements shall deliver them to the Agency, for public disclosure, within 60 days from the balance sheet date.
The legal persons, i.e. sole traders that recorded no business events and that have no data on assets and liabilities in business ledgers, shall deliver to the Agency, instead of the regular annual financial statement, a statement of inactivity relating to the reporting year, by 31 March of the following year at the latest.
The reporting entity that has delivered a statement of inactivity for the reporting year shall be considered a micro legal person in the following year, in compliance with Article 6 of this Law.
The statements referred to in paragraphs 1 through 5 of this Article and the statement referred to in paragraph 6 of this Article, signed by means of the qualified electronic signature of the legal representative, shall be entered in a separate information system of the Agency and delivered to the Agency electronically.
The Agency shall enable the reception of regular and consolidated annual financial statements, i.e. statements of inactivity for the last reporting year, as well as interim financial statements for the previous and current year, in compliance with this Law.
Delivery of Documentation with Financial Statements
Article 45
Legal persons and sole traders, that are obliged to have their financial statements audited in compliance with the law regulating auditing, shall, enclosed with the regular and consolidated annual financial statements referred to in Article 44 of this Law, deliver to the Agency:
1) Тhe decision on the adoption of the regular i.e. consolidated annual financial statement;
2) Тhe annual business report, i.e. the consolidated annual business report in compliance with this Law;
3) Тhe audit report, which has been prepared in compliance with the law regulating auditing, attached to which shall be the financial statements that have been subject of the auditing;
4) The corrected regular annual financial statements, i.e. corrected consolidated financial statements, adopted by the competent body, if they include corrections in relation to the delivered financial statements referred to in Article 44 of this Law.
The legal persons and sole traders shall deliver the documentation referred to in paragraph 1 of this Article to the Agency no later than:
1) Jun 30 th of the following year as regards to the regular annual financial statements;
2) July 31 st of the following year as regards to the consolidated annual financial statements.
The documentation referred to in paragraph 1 of this Article, signed by hand or by the qualified electronic signature by the authorized person, shall be entered in the separate information system of the Agency by the legal representative, in compliance with the regulations governing electronic business and shall be delivered to the Agency electronically by the same representative.
Replacement of Publicly Disclosed Financial Statements and Documentation
Article 46
A legal person, i.e. sole trader can request replacement of a financial statement that has been publicly disclosed as complete and comprising accurate calculations in the Register of Financial Statements, if it determines that the operating performance and financial position in such statement have not been reported in a true and objective manner, and if the general meeting i.e. another competent body of that legal person, i.e. sole trader passes a decision on adoption of a financial statement with modified contents compared to the publicly disclosed statement.
In the cases referred to in paragraph 1 of this Article, the legal person, i.e. the sole trader shall deliver the decision on the adoption of that statement enclosed with the financial statement with the modified contents.
Notwithstanding the paragraph 1 of this Article, the reporting entity for auditing may request replacement of the regular, i.e. consolidated annual financial statement that has been publicly disclosed as complete and comprising accurate calculations in the Register of Financial Statements and enclosed to which the documentation prescribed by Article 45 of this Law has been publicly disclosed as accurate.
In the cases referred to in paragraph 3 of this Article, the legal person, i.e. the sole trader shall deliver the regular, i.e. the consolidated annual financial statement whose contents have been modified, the decision on the adoption of that statement, as well as complete documentation prescribed in Article 45 of this Law that is relating to these statements.
The legal person, i.e. the sole trader may also request replacement of documentation prescribed in Article 45 of this Law that has been publicly disclosed as correct.
The legal person, i.e. the sole trader may request the replacement referred to in paragraphs 1, 3 and 5 of this Article until the expiry of the year following the year to which such statement relates at the latest, except in case of replacement of the interim financial statement where the application may be submitted no later than the date of delivery of the regular financial statement for the financial year in which the basis for preparation of the interim financial statement occurred.
IX REGISTER OF FINANCIAL STATEMENTS
Public Disclosure of Financial Statements
Article 47
The Agency shall publish data from the comprehensive and accurately calculated financial statements and the Statistical Report, as well as the documentation referred to in Articles 44 through 46 of this Law on its website, as part of the Register of Financial Statements, and shall issue a certificate thereof to the legal person, i.e. sole trader that shall at the same time be published on its website.
The Agency shall publish the financial statements, the Statistical Report and the documentation referred to in paragraph 1 of this Article on the website, within 60 days from the date of receipt of the complete and accurately calculated financial statement, i.e. documentation of the legal person, i.e. sole trader.
Where it is determined in the course of the verification procedure that the delivered financial statement of the legal person, i.e. sole trader is not complete and accurately calculated or that it is not classified in compliance with the Law, i.e. that the complete documentation prescribed has not been delivered, the Agency shall issue to such legal person or sole trader a notice of deficiencies identified and shall publish it on the website of the Agency within the Register of Financial Statements.
The legal person or sole trader shall be obliged to remove the identified deficiencies referred to in paragraph 3 of this Article within 30 days from the date of publication of the notice on the website of the Agency at the latest.
The Agency shall publish on its website the statements, i.e. the documentation referred to in Articles 44 through 46 of this Law, in which the legal persons and sole traders have not removed the deficiencies identified in compliance with the notice referred to in paragraphs 3 and 4 of this Article, as statements i.e. documentation which is incomplete and comprising calculation errors, upon the expiry of the time limit for acting upon such notices, and at the latest by 30 September of the following year for the reporting year concerned.
The Agency shall enable access to the statements and documentation referred to in paragraphs 1 and 5 of this Article for the last three reporting years to the users on the website of the Agency, free of any charge.
Contents of the Register of Financial Statements
Article 48
The Register of Financial Statements is a central, public, joint electronic database made up of the complete and accurately calculated statements and documentation referred to in Articles 44 through 46 of this Law.
On the basis of data referred to in paragraph 1 of this Article, data from other registers and records maintained by the Agency, as well as data delivered to it by other competent authorities and interested users of services, the Agency shall maintain the prudence database within the Register of Financial Statements.
Prudence database referred to in paragraph 2 of this Article shall be standardized in time series and brought in line with international standards, Directives of the European Union and rules of financial analysis.
Data in the Register of Financial Statements shall be maintained with a view to analyzing the economic developments in the Republic of Serbia, analyzing financial position and business performance of legal persons and sole traders and business risk assessment, and in order to provide reliable information for the users.
Maintenance of Register of Financial Statements
Article 49
The Agency shall, for the purpose of maintaining the Register of Financial Statements, be authorized to collect, record, process, archive and publicly disclose the statements and documentation referred to in Articles 44 through 46 of this Law, to distribute data from these statements, as well as to manage databases and ensure the protection of data and documents archived.
The Agency shall maintain the Register of Financial Statements through the Registrar appointed in compliance with the law governing the operation of the Agency.
The Agency shall be responsible for the authenticity of electronic entry of data contained in financial statements and the Statistical Report, for the publication, as well as for processing of other data and documents recorded in the Register of Financial Statements.
The Agency shall keep the financial statements, the Statistical Report, the annual business report, the audit report and other documentation referred to in Articles 44 through 46 of this Law for 20 years from the date of receipt thereof.
The Agency shall deliver to the National Accounting Commission, at least once a year, the information on the application of this Law in the part thereof relating to the delivery of financial statements to the Register of Financial Statements.
Competence for Prescribing Secondary Legislation relating to the Register of Financial Statements
Article 50
More detailed conditions and method of receipt and verifying compliance with the conditions for public disclosure of financial statements and documentation referred to in Articles 44 through 46 of this Law, maintenance of the Register of Financial Statements, acquisition of data to be delivered to the Agency by other competent authorities and legal persons and sole traders, as well as provision of services by +the Register of Financial Statements shall be prescribed by the Minister in charge for finance, at the proposal of the Agency.
Fees for Publication of Financial Statements and for Provision of Data from the Register of Financial Statements
Article 51
The fees for the public disclosing of financial statements and the Statistical Report, i.e. for publication of documentation referred to in Articles 44 through 46 of this Law, as well as the fees for the provision of data and for provision of other services from the Register of Financial Statements shall be determined by the Agency in compliance with the law governing the budget system.
Use of Data from the Register of Financial Statements
Article 52
The Register of Financial Statements shall provide financial statements and the Statistical Report of legal persons and sole traders to the competent registers of the Agency in which data on their status is registered.
The Agency shall provide to the National Bank of Serbia direct access to and downloading of financial statements and the Statistical Report, i.e. of all data from these statements and documentation referred to in Articles 44 through 46 of this Law, as well as any other pieces of data required by the National Bank of Serbia for the performance of its functions as provided by law, free of charge.
The Agency shall provide access to or deliver data from the financial statements, the Statistical Report and documentation referred to in Articles 44 through 46 of this Law to the Securities Commission, Tax Administration and the Statistical Office of the Republic of Serbia, free of charge.
The Agency shall deliver data from the financial statements, the Statistical Report and the documentation referred to in Articles 44 through 46 of this Law to the Ministries, Government bodies, other state authorities and organizations, authorities of the Autonomous Provinces and to the local self-government units at their request, free of charge.
The Agency shall, at the request of a user, provide original data or copies of annual financial statement, Statistical Report, annual business report or audit report and shall provide other services from the Register of Financial Statements.
The users of data, within the meaning of this Article, may use the documentation and data downloaded from the Register of Financial Statements for their own purposes only, in compliance with regulations and may not provide them to any third persons, distribute or publish them in their original form.
X THE NATIONAL ACCOUNTING COMMISSION
Establishment and Scope of Work of the National Accounting Commission
Article 53
At the proposal by the Ministry, the Government shall establish the National Accounting Commission (hereinafter: the Commission) with the task to:
1) Monitor the process of application of the European Union Directives in the field of accounting and propose relevant solutions for the national legislation;
2) Monitor the process of application of IFRS and IFRS for SMEs, and propose solutions for any problems that may arise in the course of application of these standards;
3) Monitor the process of application of this Law and secondary legislation adopted on the basis of this Law and propose to the Ministry the method of resolving any problems that may arise in the course of application of that legislation;
4) Provide opinion on the bylaw of the Chamber which regulates the form and the contents of application for issuance of license referred to in Article 18 of this Law, as well as the fees for license issuance;
5) Consider data obtained from the Agency concerning the issues relating to maintenance of the register referred to in Article 17, paragraph 8 of this Law;
6) Consider the reports of the Chamber on the issues that relate to the issuing and revocation of licenses for provision of accounting services;
7) Consider information obtained from the Agency relating to the application of this Law in the part pertaining to the delivery of reports and documentation referred to in Articles 44 through 46 of this Law to the Register of Financial Statements;
8) Provide information to the Ministry on any amendments to other legal regulation that is likely to impact the financial reporting within the meaning of this Law.
The Commission shall pass the rules on its work.
Article 54
The Commission shall deliver a report on its work to the Ministry at least once a month.
The Commission shall publish the annual report on its work on the website of the Ministry.
Composition and Financing of the Commission
Article 55
The Government shall appoint, at the proposal of the Minister in charge of finance, the President and six members of the Commission among the expert persons with knowledge and practical experience in the field of finance, accounting and auditing, among which one member shall be appointed at the proposal of the Securities Commission and of the National Bank of Serbia respectively.
The expert and administrative tasks for the needs of the Commission shall be performed by the Ministry.
Remuneration for work for the President and the members of the Commission shall be provided from the budget of the Republic of Serbia.
The amount of remuneration for the President and the members of the Commission shall be set by the Government, at the proposal of the Ministry.
Institutions Conducting Supervision and Method of Conducting Supervision
Article 56
Supervision of legal persons and sole traders, in terms of verification of correctness of recording of the business changes in the business ledgers shall be conducted by the Tax Administration in compliance with the provisions of the regulations governing the tax procedure and tax administration.
Supervision of the banks, insurance companies, providers of financial lease, pension funds and companies for voluntary pension fund management, in terms of verification of correctness of recording of the business changes in the business ledgers shall be conducted by the National Bank of Serbia as a part of its legally determined functions in compliance with the provisions of the regulations governing the business operations of financial institutions that are supervised by the National Bank of Serbia, as well as of the payment institutions and electronic money institutions, in terms of verification of correctness of recording of the business changes in the business ledgers that are related to the provision of payment services and issuing of electronic money and the activities related to such activities.
Article 57
A legal person shall be sanctioned for an economic offence with a fine ranging from RSD 100,000 to RSD 3,000,000 if it:
1) Fails to classify itself as a micro, small, medium-sized or large legal person in compliance with this Law (Article 6);
2) Fails to classify the group of legal persons in which it is the parent legal person as a small, medium-sized or large group (Article 7);
3) Fails to regulate by means of a bylaw the organization of accounting in the manner referred to in Article 8, paragraph 1 of this Law;
4) Performs processing of data on a computer, without having provided an accounting software that enables functioning of the system of internal accounting controls and renders deletion of posted accounting business changes impossible (Article 8, paragraph 4);
5) Fails to prepare the accounting documents in compliance with this Law (Article 9);
6) Acts contrary to the provisions of Article 10 of this Law;
7) Fails to deliver the accounting documents and documentation for posting within the prescribed time limit and if it fails to post a business change in the business ledgers within the prescribed time limit (Article 11);
8) Fails to maintain the business ledgers in compliance with this Law (Article 13);
9) Fails to designate by a bylaw the person entrusted with maintenance of the business ledgers and preparation of financial statements (Article 15);
10) Fails to act in compliance with the provisions of Article 16 of this Law;
11) If, within the time limit of eight days, fails to notify the Agency of the changes of all facts and circumstances based on which it has been entered in the Register (Article 18, paragraph 18);
12) Fails to make an inventory of assets and liabilities in compliance with this Law (Articles 20 and 21);
13) As a creditor, fails to deliver to its debtor the balance of outstanding invoices and if it fails to disclose in the Notes to Financial Statements the unreconciled receivables and payables (Article 22, paragraphs 2 and 4);
14) Does not prepare and does not present the financial statements in compliance with this Law (Articles 23 through 26);
15) Does not close the business ledgers in compliance with this Law (Article 27);
16) Does not comply with the time limits and method prescribed by this Law for keeping of the accounting documents, business ledgers, financial statements, annual business report and audit reports (Article 28, paragraphs 1 through 10);
17) Does not protect the business ledgers maintained on an electronic medium in compliance with this Law (Article 28, paragraph 11);
18) Does not prepare the financial statements in compliance with this Law (Articles 29 and 31);
19) Does not complete the auditing of financial statements (Article 33);
20) Does not prepare the annual business report, the corporate governance statement, the consolidated annual business report, the non-financial report, the consolidated non-financial report, statement of payments to governmental authorities and the consolidated statement of payments to governmental authorities (Articles 34 through 40);
21) Does not prepare the business ledgers, statements, decisions and other financial and non-financial information in Serbian language and expressed in Dinars (Article 42);
22) Fails to deliver to the Agency the financial statements, documentation enclosed with the financial statements and the Statistical Report for the purpose of public disclosure, in the manner and within time limits prescribed by this Law (Articles 44 through 46);
23) If it uses the data obtained from the Register of Financial Statements contrary to Article 52 of this Law.
The responsible person with the legal person shall also be sanctioned for the economic offence comprising of activities referred to in paragraph 1 of this Article, with a fine ranging from RSD 20,000 to RSD 150,000.
By way of exception from paragraphs 1 and 2 of this Article, if the National Bank of Serbia, in the course of the supervision procedure referred to in Article 56, paragraph 2 of this Law, determines that the bank, the payment institution, the electronic money institution, the insurance company, the provider of financial lease and the company for management of voluntary pension funds have violated the law in the manner specified in Article 57, paragraph 1 of this Law, the National Bank of Serbia shall impose fines against those legal persons and responsible persons, in compliance with the provisions of the law regulating operations of financial institutions supervised by the National Bank of Serbia.
Article 58
A sole trader shall be sanctioned with a fine ranging from RSD 100,000 to RSD 500,000 for a misdemeanor comprising of the actions referred to in Article 57, paragraph 1, item 1), items 3 through 17), item 18) in the part that pertains to Article 29 of this Law and items 21) through 23) of this Law.
XIII TRANSITIONAL AND FINAL PROVISIONS
National Accounting Commission
Article 59
The National Accounting Commission, established in compliance with the Law on Accounting and Auditing ("Official Herald of RS", Nos. 46/06, 111/09 and 99/11 - other law), shall continue its operation in compliance with this Law.
Time Limit for Adoption of Secondary Legislation
Article 60
The implementing secondary legislation for this Law shall be adopted within six months from the date of entry into force of this Law at the latest, and it shall become applicable from the financial statements prepared on 31 December 2021.
Until the beginning of application of the secondary legislation referred to in paragraph 1 of this Article, the secondary legislation adopted on the basis of the Law on Accounting ("Official Herald of RS", Nos. 62/13 and 30/18) shall be applied.
Providers of Accounting Services
Article 61
The legal persons, i.e. sole traders with registered predominant business activity for provision of accounting services, shall bring their operations in line with the provisions of this Law within three years from the date of entry into force of this Law at the latest.
Register of Providers of Accounting Services
Article 62
The Register referred to in Article 17 of this Law shall begin its work on 1 January 2021.
Article 63
Persons referred to in Article 18, paragraph 2, item 3) and paragraph 6, item 3) of this Law who acquired professional titles in compliance with the Law on Accounting ("Official Gazette of FRY", Nos. 46/96, 74/99, 22/01 and 71/01) and Law on Accounting and Auditing ("Official Gazette of FRY", No. 71/02 and "Official Herald of RS", No. 55/04) may use such titles accordingly for compliance with the requirements referred to in Article 18, paragraph 2, item 3) and paragraph 6, item 3).
Beginning of Application of Individual Provisions of This Law
Article 64*
Provisions of Article 4, paragraph 7, Article 32, paragraph 4, item 2), Article 39, paragraph 3, item 2) and Article 40, paragraph 5, item 4) of this Law shall apply from the date of admission of the Republic of Serbia to the European Union.
Provisions of Article 6, paragraphs 13 and 14, Article 29, Articles 44 through 49, Articles 51 and 52 of this Law shall begin to apply from the financial statements prepared on 31 December 2021.
Article 65
On the date of entry into force of this Law, the Law on Accounting ("Official Herald of RS", No. 62/13 and 30/18) shall be repealed, except for the provisions of Article 2, items 7) through 9), Articles 33 through 38, Articles 40 and 41 of that Law which shall cease to be in force on 30 December 2021.
Article 66
This Law shall enter into force on 1 January 2020.
PUBLISHER’S NOTE
* The provisions of Article 9, paragraph 3 and Article 64, paragraph 3 of the Law on Accounting ("Off. Herald of RS", No. 73/2019), cease to be valid on May 7, 2021, the day the Law on Electronic invoicing ("Off. Herald of RS", No. 44/2021) enters into force.