K22 - Business and Securities LawReturn

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 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.

The paper deals with negative impacts of chosen regulatory attributes (regulatory arbitrage, relative over and under regulation) on economic agents' behaviour in the financial distribution area. Using three case studies from the Czech market (life insurance, corporate bonds and pension savings), we demonstrate situations, when state regulatory incursions caused substantial deformations of the target market and the subsequent detriment of final customers. Although partial market failures cannot be ruled out, our observations show that in particular, the regulatory arbitrage between individual sub-sectors of the financial market is a potent stimulator of distribution momentum, which, in turn, can lead to future systemic risks.

This paper deals with developments in the sector of credit unions in the Czech Republic. The first part of the paper describes the history of the sector and the factors that influence it. The second part deals with the development of credit unions in recent years. The indicators of financial analysis describe the development of the sector and show the influence of individual events, e.g. withdrawal of authorization to operate as a credit union or transformation to the bank. Major emphasis is devoted to the amendment to Act No. 87/1995 Coll., which regulated the obligations of members of credit unions and imposed their greater participation in the credit union itself. In the paper, there is also described an effect of low interest rates on the development of profitability and return on equity. At the end of the paper there is prediction of future development regarding the changes of the regulation and market environment.

The paper shows the way you can in forensic practice solve problem of proving the existence of excessive trading (churning) in client securities account held by securities dealer. Mentioned securities account held derivatives also. Derivatives are especially futures, options and ETF funds that invest a substantial portion of its own assets in futures and options. Furthermore, the work describe how it is possible in the forensic practice prove the "control of trader over customer account". It is also discussed the issue of calculation of indicators (esp. Cost to Equity) and the absence of clear algorithms that describe how the calculations of indicators of churning should be done and not only for portfolios (client accounts) containing derivatives. Special attention is paid to the determination of the size of property damage (loss) calculation by churning to the client.

The paper focuses on distribution of unrealized profits. It identifies arguments for such a discussion. Substance of creditor protection, equivalent rights for shareholders and creditors, capital maintenance concepts and accounting aspects of these phenomena are discussed. The paper clearly states and distinguishes the position of accounting and law and identifies relationships between both systems. Authors tend to distribution of unrealized profits for sufficient creditor protection under contemporary capital maintenance concept.