1. Building order returns and costs control
Lecture was elaborated with the help of grant project of Ministry of Education, Youth and Sports, FRVŠ n „Innovation of Subject Financing of Building Order“
Building order returns and costs control

2. Function of Accounting
Provides information fro decision making and management of the company
Provides information about the company's economy
Enables the control of the property economy
Assurance of information for tax purposes
Serves as a proper evidence in disputes
Basic legal document:
Law n. 563/1991 Coll., about accounting
The duty is to do accounting completely, in conclusive and right way
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3. Ways of Business Activities Filing
Tax evidence – defined by income tax law, used by physical persons having incomes from enterprise (traders, lawyers, consultants) that are not accounting entity.
Accounting – defined by accounting law, used by corporations and by physical persons that became accounting entities.
Physical person – accounting entity:
Revenues from last year higher then 25 mil. CZK
Voluntary decision of physical person
Registration in trade register
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4. Basic Differences Between Tax Evidence and Accounting
Tax evidence serves mainly for the right income tax base
assessment, accounting provides more complex view of the
company's management.
Economic result is ascertained:
In tax evidence – difference between incomes and expenditures
In accounting – difference between revenues (returns) and costs
Incomes – accepted money in cash or on bank account
Expenditures – decrease of money in cash or on bank account
Revenues – outputs expressed in CZK
Costs – consumption of productive factors
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5. Financial and Managerial Accounting
Financial accounting
Provides compact set of information about assets and liabilities of the company, about costs, revenues and economic result. Records financial relations of the company in the face of external surroundings.
Managerial accounting
Crates the set of information necessary for efficient management inside the company. Parts are e.g.:
Interplant accounting
Calculations
Budgeting
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6. of managerial accounting
Financial accounting
Calculations
Budgets
Controlling
Statistics
Financial analysis
OUTPUTS
of managerial accounting

7. Financing of Building Order
Accounts
Distribution of balance sheet into particular items of assets and liabilities, for each
of them is created individual „table“ = account.
On accounts it is possible to monitor:
State at specific date – opening balance
Changes of items – increases and decreases and their additions (turnovers)
State at the end of accounting period – ending balance
Scheme of the account – letter T
Agreed denomination of account sides:
Left side Debits – debit side of account
Right side Credits – credit side of account
Accounts created by distribution of the balance sheet are called „balance sheet
accounts“
Active
Passive
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8. Scheme of Bookkeeping on Particular Types of Accounts
a) Active accounts
Debits Credits
Opening balance decreases of actives
increases of actives
Ending balance
OB + Td - Tc
b) Passive accounts
decreases of passives Opening balance
increases of passives
OB + Tc - Td
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9. Account Classification
Overview of all accounts used in the accounting system
It consists from ten account classes, each class is divided into groups, in the frame groups there are defined specific accounts
Account classes are following:
Account class 0 – Fixed assets
Account class 1 – Inventory
Account class 2 – Financial accounts
Account class 3 – Accounting relations
Account class 4 – Capital accounts and long-term payables
Account class 5 – Costs
Account class 6 – Revenues
Account class 7 – Closure accounts
Account classes 8, 9 – Interplant accounting
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10. Financing of Building Order
Balance Sheet is an Overview of Assets and Liabilities at Specific Moment
Assets Liabilities
A. Receivables from subscriptions
B. Fixed assets A. Equity
1. Intangible fixed assets 1. Registered capital
2. Tangible fixed assets 2. Capital funds
3. Long-term financial assets 3. Reserve funds
C. Current assets 4. Profit / loss previous years
1. Inventory 5. Profit / loss current year
- materials B. Other sources
- work in progress and semi-products 1. Reserves
- merchandise 2. Long-term payables
2. Long-term receivables 3. Short-term payables
3. Short-term receivables trade payables
4. Short-term financial assets payables to social securities and social ins.
- cash tax liabilities
- bank accounts payroll
- short-term financial asset acquired 4. Bank loans and financial accommodations
D. Accruals C. Accruals
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11. Example of Changes in Balance Sheet Items
Actives Opening balance sheet Passives
Cash CZK Registered capital CZK
Computer CZK
Bank account CZK Liabilities towards
financial office CZK
Totally CZK Totally CZK
From bank account was paid tax to financial office
Actives Ending balance sheet Passives
Cash CZK Registered capital CZK
Computer CZK
Bank account CZK
Totally CZK Totally CZK
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12. Financing of Building Order
Profit / Lost Account
Provides information about reproduction process in a company (about costs, revenues and the economic result creation)
From the profit and lost report it is possible to find out the creation of following economic results:
Economic result for the current company’s activity
Operational economic result
Financial economic result
Additional (exceptional) economic result
Profit and lost report includes the income tax creation
For the current company’s activity
For the additional (exceptional) company’s activity
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13. Financing of Building Order
Profit / Lost Account
Revenues
Operational revenues (returns from sale of products and services)
Financial revenues (interest)
Extraordinary revenues
Cost
Operational costs (material, wages)
Financial costs (paid interest)
Extraordinary costs
Revenues - costs = profit / loss before tax
Corrections of profit
Tax base
Income tax
Profit (after tax)
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14. Financing of Building Order
Cash Flow Statement
Describes the amount and the structure of cash-flows running during accounting period in the company
At the cash-flow report creation there are used data from the balance sheet and the profit and lost report
Separately there are described cash-flows in the frame of operational, investment and financial company’s activity
Whole cash-flows it’s possible to find out by the addition of
partial cash flows:
Operational
Investment
Financial
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15. Cash Flow Statement – General Structure
Net economic result
+ depreciation of fixed (long-term) assets
+,- changes in the active assets state
+,- changes in the liability’s state
Operational cash flows
+ incomes from the fixed (long-term) assets sale
- purchase of fixed (long-term) assets
Investment cash flows
+ increasing of (bank) credits
- bank credits repayments
+ increasing of long-term sources (liabilities)
+ dotations
- payments of dividends
Financial cash-flows
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16. Revenues and Costs for Construction from the Aspect of Supplier
Are monitored from the reason of revenue and cost control for needs of management
From the aspect of supplier arise:
Revenues for:
Own products
Services
Merchandise
Costs for:
Consumption of materials
Wages
Social and health insurance
Services (sub-supplies, phone services, energy, projects)
Consumption of fuel
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17. Monitoring of Costs on Building Order
Revenues – account class 6..
Costs – account class 5..
Account class 6..
Account group 60 revenues for own production and goods
Synthetic account 602 returns from sale of services
Analytic account Revenues from sale of services (order . 1)
Account class 5..
Account group 50 consumed purchases
Account group 51 services
Synthetic account 512 traveling expenses
Synthetic account 518 Other services
Analytic account Other costs for order n. 1
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18. Analytic Evidence of Costs and Revenues
Synthetic accout (costs)
Costs for material, order n
Costs for direct material, order n
Costs for overhead material, order n
Synthetic account (revenues) 6..
Analytic evidence of revenues from sale of services,
order n
Economic result – the difference between revenues and costs
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19. Costs in Accounting System
The most frequent revenues according to the kind – synthetic accounts
Revenues for own products 601
Revenues from sales of services 602
Revenues from sale of merchandise 604
The most frequent costs according to the kind – synthetic accounts
Consumption of material 501
Consumption of energy 502
Services 518
Wage costs 521
Social and health insurance 524
Depreciation 551
Financial costs 568
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20. Classification of Costs from the Intra-plant Aspect
Purpose classification of costs
Line of outputs – assignment of costs to specific outputs
Line of departments – assignment of costs from the aspect of their arising
Classification according to the capacity utilization
Fixed costs – in the frame of certain production capacity no dependence on amount of production
Variable costs – dependant on the amount of production
Classification according to the bookkeeping
Primary – kept on account just in the financial accounting
Secondary – arise as a result of co-operation with other departments
Classification according to the calculation
Direct – possible to express them on the calculation unit (m2, m3, order)
Indirect – no possibility to express them on the calculation unit
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21. IFSR – Standards in the Area of Civil Engineering
It concerns about the international standard of financial reporting
For the civil engineering is in the frame of IFRS determined one standard IAS 11 – Building Contracts
Czech Accounting Standards do not have special standard for area of civil engineering
From the financial aspect costs in IAS 11 are classified in following way:
Acceptable
Directly related to the specific contract (material, wages, depreciation of machines, transport, repairs, sub-supplies, intra-plant costs …)
Generally related (overhead costs for construction, administration of building, costs for project, building overhead costs including administration and accounting of the construction)
Costs handed to the customer according to the special agreement (research and development specified in the agreement, concluded general administration)
Not acceptable
Costs, which is not possible to accept (general administration of a company, costs for sale, depreciation of buildings and machinery not used during the building order realization …)
Costs, which it is not possible to calculate (operational overhead costs of not finished constructions and not handed sub-supplies, costs for material and equipment not consumed in the production process, reserves for future costs …)
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22. IFSR – Standards in the Area of Civil Engineering
IAS is related to contracts with the fixed price and contracts with the price created as an addition to costs
Revenues are defined as a percent share in the contracted price of finished part of construction (relationship between consumed costs and total costs or only consumed costs)
From the aspect of revenues IAS accepts only the revenues to that were in the same accounting period exerted costs relating with the specific order
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