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FINANCIAL MANAGEMENT - ACCOUNTING AND TAX ASPECTS OF DEBT CAPITAL DECISION MAKING – CASE STUDY IN CZECH ENVIRONMENT
Abstract
Optimal structure of the equity and debt capital is continually debated topic on theoretical as well as practical level for decades. Financial managers when they make decision about the sources of the company resources are influenced by various factors –from the economic reality of the country in general to specific conditions of individual capital providers. Our contribution is focused on decision making process in selected debt capital's financing of business activities. The aim of the paper is to discuss benefits and negatives of the fixed asset's financing by financial leasing in the contrast with long-term bank loan in the Czech accounting and tax legislative conditions after civil law recodification. Comparative analysis was used. Results are demonstrated in a case study and they are discussed in view of potential tax savings, the proper displaying of selected sources in the financial statements (balance sheet) and other sequential impacts on decision making in managing the long-term debts of the company.
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