G34 - Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate GovernanceReturn

This article focuses on possible approaches to accounting and tax issues that arise during the business combinations, with an emphasis on the use of management accounting methods for effective performance line management and cost allocation. The theoretical links between financial and management accounting and the processes of mergers and divisions are presented. The text also analyzes specific areas that need to be addressed in corporate’s divisions, including the allocation of acquisition prices, tax losses, overhead costs, and other transactions from the decisive date of the division to the date of legal effects. Based on a case study, the article demonstrates the practical application of calculation methods for the appropriate allocation of overheads and tax losses arising during the division. The main contribution is to propose a specific procedure and methodology that can be used by companies to allocate costs in a fair and economically justifiable manner and to optimize accounting and tax strategies in corporate divisions. The research results show that the use of management accounting methods contributes significantly to the transparency and efficiency of cost management in the process of business combinations.

This article with a topic “Accounting and taxation of mergers in Slovakia” is devoted to the topics that focus on mergers realised in Slovakia, but also on cross border mergers where at least one Slovakian company participates in. The article is focused mainly on tax and accounting aspects with emphasis on legislative changes connected to mergers, mainly in case of amendments of tax law and the Commercial code of Slovak Republic. Part of the article is an analysis of domestic and cross border mergers in Slovakia in period of ten years, since 2012 to 2022.

This article focuses on cross-border mergers carried out between 2008 and 2020 with Czech companies, while in the introduction the reader is introduced to the entire issue of cross-border mergers together with the definition of the reasons for this transaction. For a clear definition of adequate and currently valid legislation in this area, the historical development of the essential European directives regulating mergers and their amendments until the beginning of 2022 is presented in Chapter 2, with the determination of the obligations that companies incur when carrying out a cross-border merger. A substantial part of the text is focused on the analysis of the total number of cross-border mergers that were implemented with Czech companies in the years specified above. The total frequency is then broken down and analyzed according to the individual member states in which the company participating in the cross-border merger with the Czech company had its headquarters, and the basic parameters of the merger were examined. The greatest attention is paid to the mergers of Czech and German companies, which are expected to be very frequent due to the geographical location of both countries, and to the analysis of the individual elements of a cross-border merger according to the completed merger project. The last part of the entire text deals with the evaluation of the management and performance of companies in the years following the chosen decisive date of the merger of the companies participating in the Czech-German cross-border merger.

This essay deals with business combinations under common control and discusses possible accounting treatments depending on needs of users of financial statements. First, general methods used for business combinations are described, then it comes closer to business combinations under common control underlining their specific characteristics and how these should be treated in financial statements in various situations (e.g. a non-controlling interest involved, a simple reorganisation within a group). In the end, it shortly outlines some of different approaches in various countries to emphasize the need of unification of accounting methods and enhancing the comparability of financial statements when accounting for business combinations with the same economical substance.

This article discusses the basic issues associated with the blockchain. Blockchain logs transactions, so the usage is almost infinite. Blockchain can record virtually any transaction, both digital and physical. Blockchain technology would mean that trading and business have a trustworthy and transparent system, as the uniqueness is that one-time recordings cannot be edited retrospectively and therefore remain in history.
Blockchain technology could significantly reduce the cost of bookkeeping, tax advice, and auditing, to companies emerging from outsourced services or internal activities. If the transactions were to be accounted for centrally and not for separate books, then all records would be visible to notaries, banks, auditors, financial officers and other institutions transparently and in real time. These entities would be able to control transactions much easier and more efficiently, and could test much more information and data.
Blockchain technologies are expected to be used in a wide range of industries, including accounting and auditing. The aim of the article is to introduce this issue, to get acquainted with selected opinions published by relevant experts of consultancy companies, professional organizations and other institutions.

The Transformation Act came into effect in 2008 as a consequence of transposition of the Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies. The directive aims to secure conditions for cross-border mergers within the European Union. This paper focuses on presentation of results of a study whose aim was to identify the development of characteristics of the cross-border mergers with the participation of a Czech company within eight years after the effective date of the Transformation Act. The analysis is based on real life data of mergers. The research focuses on the development of quantity and type of cross-border mergers whose project was filed in the public register, quantity of finished mergers, number of participating companies and the country under whose legal system the participating companies operate, the position of Czech companies, ownership structure of participating companies, their legal form. The obtained data reveal the persistent differences in the national law of the member states which prevent the proliferation of cross-border mergers. According to the authors, this situation can be solved by the unification of the cross-border mergers legislation within the European Union as a whole.

The objective of this paper is to analyze the impact of cross-border merger and acquisitions on shareholders wealth of acquiring firms from developing countries with a focus on capital market integration. I examine whether announcement effects of takeovers differ for shareholders in developing countries with a developing capital market and highly growing economy from studies for developed markets. Data is used for TIMPS from the period 2000-2010 and standard event study methodology is used for this purpose. I find significant positive abnormal returns for acquirers. The study could be relevant for shareholders, global fund managers as well as financial regulators.

This paper deals with the development of corporate governance in companies in the Czech Republic and Great Britain in 2012-2013. Aim of this paper is not only to become familiar with the basic regulations of the issue, but also draw attention to the state of corporate governance in the area of audit committees, remuneration and nomination committees and internal audit in these countries. Article compares developments in the implementation of audit committees, remuneration, nomination and internal audit of selected listed companies on the Prague Stock Exchange in 2012 and 2013.

Mergers and acquisitions (M&A) have been long attracted interest from academics. Especially the performance of cross-border mergers and acquisitions is a popular research topic in recent years. Researchers have come up with various criteria to evaluate M&A performance. There are inconclusive results on the literature on the consequences of cross border mergers and acquisitions (M&A) on corporate performance. This paper investigates and summaries the three most widely used measures of M&A financial performance, namely accounting-based measures, market models-based measures and managers' subjective assessments and its effects on the financial performance.

This article deals with firms' defaults and empirically tests its key macroeconomic determinants. The conducted empirical analysis employs quarterly time series of the number of insolvency petitions filed in the period 1996-2009. The obtained results point out prediction ability of the growth rate of real consumption and investment, change in the growth rate of real foreign demand, interest rates, change in the growth rate of the nominal exchange rate and change in the growth rate of real wages on firms' defaults development. The study confirms a strong link between firms' bankruptcy rates and the macroeconomic development in the Czech economy.

Payback period is not suitability criterion for evaluation great part of investment projects and also for creation guaranteed redemption price of energy. It ignores time factor and also cash flows after the cut-off date. For projects with greater internal rates of return and with longer economic lives it can be proved that evaluation by payback period and by internal rate of return is significantly approximate. Interest payments from long debt capital should not be included in project cash flow. It can be used precisely valuation by adjusted net present value or by adjusted weighted average cost of capital.

Selected aspects of new legal regulation of corporations in the Czech Republic is described and analyzed in this paper. These new stipulations will affect the corporate financial management in the Czech Republic from the beginning of 2013. The changes are not substantial in many aspects; however the regulation of transfer pricing and information obligations of corporations towards shareholders changes significantly. Till now the regulation of transfer prices in corporate law led to the same results as the regulation stipulated by tax law. Now the new law on business corporations allows compensation of the transfer prices with the advantages, which result from the membership in multibusiness enterprise (holding).

We examine agency cost in the multibusiness enterprises (hereinafter "MBE"). Our goal is to find out, whether is there a positive relationship between the complexity of MBE and agency cost. Results are ambiguous, nevertheless we got an indirect indication that more complex MBE bring more advantages than disadvantages and that the avoidable agency costs are effectively eliminated at the lower levels of MBE structure. It emerges then that the main reason for agency cost is information asymmetry and the largest part of avoidable agency cost emerges in the highest levels of corporate hierarchy.

The main aim of the 10th European directive no. 56/2005/EC, about cross-border mergers was to allow free movement of capital among Member states. After the implementation the tax, business and accounting differences should disappear. Text of this directive is not in certain areas exact and it causes different implementation into business law in Member states. There are several differences between Czech and Slovak legislative regulates cross- border and national mergers as well. The main goal of this paper is to describe legislative in the Slovak Republic before the novelization in 2010 and after it. Slovak valid legislation afterwards compare with the Czech one. In the end of the paper I describe differences and disharmony between the Czech and Slovak regulation of cross-border mergers.

This paper deals with certain problematic issues that are associated with the current legal regulation of cross border mergers. Given the nature of these issues, they should be addressed within the upcoming amendment of the Act. No. 125/2008 Coll., on Transformation of companies. With respect to these problematic issues, this material focuses, for instance, on provisions of the Transformation Act that are in violation with the European law, or on identification of legal persons that may participate on a cross-merger under the Czech law. In addition, this text discusses several issues concerning practical realization of a particular cross border merger.

The article deals with the possibility of taxing the company plans to expand abroad through cross-border mergers. They discussed two alternatives fiscal relations - establishment of a subsidiary company for the use of losses incurred by subsidiary companies to reduce the tax base of the parent company. The second alternative examines the application of the losses incurred during the existence of branches abroad. Income tax advantages that may be gained in cross-border merger were implemented by virtue of Directive 90/434/EEC. The Income Tax Act allows Czech successor companies to take over tax losses that were incurred by foreign merging companies and that have not been used yet. At this point, tax advantages could be at least described as problematic or even unattainable.

Typical requirements for investment units export financing are high capital, specialized financing and export banks that are associated with insurance agencies. Investment units export financing is often accompanied with various long term investment risks and payment risks. Foreign exchange exposure and risk are relatively low in comparison with the other risks. Common alternatives of export investment units export financing are supplier and customer long term credits, project financing, export financial leasing, and pre-export financing. The majority of countries have national systems of export promotion by means of special export banks and securing societies. State export promotion of investment units must not disturb the international competitive environment. Economic recession in the Czech Republic requires improvement of entire export financial system. This system should be expanded outside European Union, and also offered to project developers. More funding should be allocated in order to sufficiently cover pre-exporting financing, financing of foreign market prospects, and export of services.

Estimation of the lack of marketability discount remains one of the big issues in business valuation. Empirical studies of the lack of marketability discount originated in the USA are one of the main resources for business valuers in the Czech Republic. However, they are used rather intuitively without any deeper analysis of the key factors that influence the value of the discount. The theoretical quantification models of the discount are not very well known and used in the Czech Republic. The paper presents a brief overview of these theoretical models and typology of empirical studies, their results but also limitations which we have to consider when using them in practical business valuation. Finally, recommendations are made for the use of US empirical studies in the conditions of the Czech Republic.