engleski

Accounting aspects of employee stock ownership plan in Croatian companies

Stock allocation to the employees is every day even more frequent appearance worldwide and in Croatia, too. Operating instruments for above mentioned are ESOP programs, which present a form of employee ownership and are likely to be established through privatization legal framework in Croatia. Aims of employee stock allocation are multiple, and some of the most important are: increment of employee benefits, but at the same time liquid funds are hold within the company which represent financing and expansion source. On the other hand, employees, as stockholders, are interested in profit growth, because in that situation their ownership interests are satisfied, and undoubtedly efficiency of the company is increased. All above mentioned had and still has influence on development of accounting models for described transactions. As a result of this effort, parts of accounting profession framework are: International Financial Reporting Standard 2 – Share-based Payment, and International Accounting Standard 19 – Employee Benefits. The main hypothesis of this paper is that ESOP programs, as a way of employee motivation, are introduced in increasing number of companies in Croatia, which requires adequate presentation of these transactions in financial statements, but is still not elaborate enough in accounting literature. Presentation of these transactions in financial reports of Croatian companies should be in accordance with financial reporting framework which is defined by Accounting Act which regulate appliance with International Financial Reporting Standards for large entrepreneurs, as well as for the companies listed on the stock exchange. At the same time, other entrepreneurs can apply these standards or standards set by the Financial Reporting Board. In other words, financial reporting framework in Croatia is in accordance with the financial reporting framework in the European Union.

ESOP, Croatian companies, Accounting, Employee benefits

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