Government changes accounting Law

The Government on Tuesday discussed the ordinance draft regarding the modification and completion of accounting Law 82/1991 republished. The new form aims at making the accounting Law compliant with the EU norms in this field.

The ordinance stipulates that companies are divided in two categories. The first one comprises large companies, enforcing regulations compliant with the EU directives and with international standards, approved through a decision of the Finance minister.

The second category includes small and medium companies, namely legal persons meeting two of the following three criteria: turnover on the previous year is below 5 million euros, total assets on the previous year are less than 2.5 million euros and the average number of employees for the previous year does not exceed 49 persons.

Large companies submit an annual financial statement comprising the accounting balance, the profit and the losses account, the situation of own capital modification, the situation of treasury flows and explanatory notes. Large companies also have to submit the financial statements within 120 days since the end of the financial year, while the companies from the second category have to submit them within 60 days.

The modifications brought to the accounting Law concern the responsibilities held by the National Securities Commission (CNVM) and the Insurance Overseeing Commission (CSA) in drafting the accounting regulations.

The accounting regulations of the credit institutions, insurance and re-insurance companies and the units operating on the capital market are drafted by the National Bank of Romania (BNR), CSA and CNVM and are approved by the Finance Ministry.

The new text of the accounting Law stipulates that assets are registered in the account books at their purchase or production value, while the items that were neither acquired nor produced must be registered at their exact value.

The old text of the Law stipulated that these last items were registered at their market value. The new law maintains the stipulation according to which debts and receivables are registered at face value.

The new law also stipulates that profit and losses are registered in the accounting books monthly and cumulated since the beginning of the year.