Accounting valuation of financial assets in Croatia

The new Financial Accounting Standard (FAS) 157-4 issued by the Financial Accounting Standards Board (FASB) of USA on April 2, 2009 allows companies to use more leeway in valuing their assets under mark-to-market accounting. This change still requires financial institutions to mark transactions to market prices but more so in a steady market and less when the market is inactive. Such changes could significantly boost bank statements of earnings and loses. Inspired by this change in valuation of financial assets in USA accounting, in this paper we analyze the current situation in accounting valuation of financial assets in Croatia. In the first part of the paper we will take a look at Croatian accounting legislation and in the second part we will define financial assets according to Croatian law and explore which accounting standards are stringed with financial assets and its impact on the financial result. Finally, in the last part we will look in future perspectives of the development of accounting valuation of financial assets in Croatia.