The transition of an individual entrepreneur from tax records to accounting in the context of business financing through subsidies

This bachelor thesis focuses on the transition of a sole proprietor from tax records to double-entry accounting in the context of business financing through subsidies. The aim of the thesis is to evaluate the differences in the recording of subsidies under both regimes and to evaluate the impact of the transition on the tax base. The theoretical part defines the key differences between the two systems, the transition process, the rules for the accounting for investment and operating subsidies, and the basic characteristic of subsidies in the Czech Republic. The practical part presents the model example of an entrepreneur in the field of arboriculture who switched to double-entry accounting as of 1 January 2024. The results show that the impact of the subsidies on the tax base was similar in both regimes. However, the transition itself led to an increased tax base due to mandatory adjustments related to previously recorded items. In the long term, the transition appears beneficial in the context of subsidy use due to greater transparency and improved access to financing.