Order on Accounting Reporting from June 30, 2019

(1) The system of accounting reporting on June 30, 2019 of the economic operators stipulated in art. 1 shall apply to the entities to which they are subject. The accounting regulations regarding the individual annual financial statements and the consolidated annual financial statements, approved by the Order of the Minister of Public Finance no. 1.802 / 2014, as subsequently amended and supplemented, and which in the previous financial year had a turnover exceeding 220,000 lei

(2) The system of accounting reporting on June 30, 2019 of the economic operators provided in art. 1 also applies to the persons to whom they are incumbent Accounting regulations in line with the International Financial Reporting Standards, approved by the Order of the Minister of Public Finance no. 2,844 / 2016, as subsequently amended and supplemented, and which in the previous financial year had a turnover exceeding 220,000 lei.

(3)The provisions of this Order shall also apply to economic operators whose financial year is different from the calendar year

(4) In order to prepare the accounting reports on June 30, 2019, the compliance with the criterion provided in paragraph (1) and par. (2) shall be made on the basis of the indicators determined in the annual financial statements of the previous financial year or the balance of checks concluded at the end of the preceding business year. The same provisions apply to entities that have opted for a different financial year than the calendar year, according to the Accounting Law no. 82/1991, republished, as subsequently amended and supplemented.

(5) The persons who are subject of this Order are referred to entities as such.

Art. 3

(1) For the purpose of establishing accounting reporting forms on June 30, 2019, economic operators applying the Accounting Regulations on the individual annual financial statements and the consolidated annual financial statements approved by the Order of the Minister of Public Finance no. 1.802 / 2014, as subsequently amended and supplemented, shall take into account the criteria set out in point 9 of the respective regulations

     (2) The total assets, net turnover and average number of employees are determined on the basis of the annual financial statements of the previous financial year. The same applies to entities that have opted for a financial year different from the calendar year, according to the accounting law.

Art. 4

In the case of legal entities with subunits without legal personality, the activity carried out by them is summed up by the legal entity that prepares the accounting reporting on 30 June 2019

Art. 5

(1) In order to provide information for the institutional system of the state, the provisions of this Order shall also apply to subunits opened in Romania by companies resident in countries belonging to the European Economic Area, irrespective of the chosen financial year, according to the law. Subsidiaries opened in Romania by companies resident in countries belonging to the European Economic Area verify compliance with the criterion set out in Article 2 on the basis of the indicators determined according to the annual accounting report at 31 December 2018.

(2) From an accounting point of view, the permanent headquarters in Romania belonging to legal entities with headquarters abroad are subunits without legal personality belonging to these legal entities and have the obligation to draw up the accounting reports required by the accounting law.

(3) Where the legal person domiciled abroad carries on business in Romania through several permanent establishments, the accounting reports required by the accounting law shall be drawn up by the permanent establishment designated to fulfill the tax obligations, reflecting the activity of all permanent establishments. For this purpose, the designated permanent office shall sum up information relevant to the work carried out by each permanent establishment

Art. 6

The reporting obligations established by this Order do not remove the obligation of economic operators with full or majority ownership or ownership held directly or indirectly by the central or local public authorities to carry out the reporting under the applicable law

Art. 7

Entities authorized, regulated and supervised by the National Bank of Romania and the Financial Supervisory Authority, submit to the territorial units of the Ministry of Public Finance accounting reports on June 30, 2019 in the format and within the time limits provided by the regulations issued by the National Bank of Romania, respectively Financial Supervisory Authority

Art. 8

  • In the General Accounts Plan contained in paragraph 594 of the Accounting Regulations on the individual annual financial statements and the consolidated annual financial statements, approved by the Order of the Minister of Public Finance no. 1.802 / 2014, published in the Official Gazette of Romania, Part I, no. 961 of 30 December 2014, as amended and supplemented, the following entries are added: 490 “Adjustments for doubtful debts from advances to suppliers”, 4901 “Adjustments for depreciation of receivables related to the purchase of goods in the nature of inventories” (P), 4902 “Impairment adjustments (P), 4903 “Adjustments for doubtful debts  from property, plant and equipment” (P), 4904 “Impairment adjustments for intangible assets” (P), 6818 “Operating expenses related to impairment adjustments for receivables from advances granted to suppliers’ and 7818 ‘Income from adjustments for impairment of claims representing advances to suppliers’’
  • In Chapter 16 “Function of the accounts” the function of account 490

“Adjustments for doubtful debts from advances to suppliers” is inserted, with the following content:

Account 490 «Adjustment for doubtful debts from advances to suppliers»

With this account, account is taken of the adjustments made for the depreciation of receivables representing advances paid to suppliers.

Account 490 «Adjustments for doubtful debts from advances to suppliers» is a passive    account.

In the credit of account 490 “Adjustments for doubtful debts from advances to suppliers ” is registered:

  • the value of the adjustments made for the impairment of claims representing advances paid to suppliers (681).

In the account debit 490 «Adjustments for doubtful debts from advances to suppliers “» there will be registered:

– reducing or cancellating of the adjustments made for the impairment of claims     representing advances to suppliers (781).

The account balance represents depreciation adjustments.”

  • For item 681 “Operating Expenses on Depreciation, Provisions and Impairment Adjustments” in Chapter 16 “Accounts’ Function”, the item “Value adjustments for impairment of receivables representing advances to suppliers (490)” is added.

  • For the account 781 “Income from provisions and impairment adjustments for operating activities”, in Chapter 16 “Function of accounts”, the item “amounts representing the reduction or cancellation of adjustments for impairment of receivables corresponding to advances to suppliers” (490) is added.

Art. 9

In the plan of accounts, at paragraph 196 of the Accounting Regulations in line with the International Financial Reporting Standards, approved by the Order of the Minister of Public Finance no. 2,844 / 2016, published in the Official Gazette of Romania, Part I, no. 1.020 and 1.020 bis of 19 December 2016, as amended and supplemented, are introduced the accounts 490 “Adjustments for doubtful debts from advances to suppliers”, 4901 “Adjustments for impairment of receivables from purchases of goods in the nature of inventories” (P), 4902 ” (P), 4903 “Adjustments for impairment of receivables from property, plant and equipment” (P), 4904 “Adjustments for depreciation of receivables related to intangible assets” (P), 6818 “Expenses for depreciation allowances claims representing advances to suppliers “and 7818” Adjustments for doubtful debts from advances to suppliers “

Art. 10

(1) In the General Accounts Plan contained in paragraph 344 of the Accounting Regulations for Legal Entities without a Patrimony Purpose, approved by the Order of the Minister of Public Finance no. 3.103 / 2017, published in the Official Gazette of Romania, Part I, no. 984 of 12 December 2017, as amended and supplemented, are introduced the accounts 490 “Adjustments for doubtful debts from advances to suppliers“, 4901 “Adjustments for the impairment of receivables related to the purchase of goods in the nature of inventories” (P), 4902 “Adjustments for impairment of receivables related to the provision of services” (P), 4903 “Impairment adjustments (P), 4904 “Adjustments for depreciation of intangible assets” (P), 6818 “Operating expenses related to impairment adjustments for advances to suppliers” and 7818 “Adjustment receipts for impairment of receivables related to advances granted suppliers”.

(2) For the item 681 “Operating Expenses on Depreciation, Provisions and Impairment Adjustments” in Chapter 10 “Function of Accounts”, there is added the item “value of adjustments for impairment of receivables representing advances to suppliers (490)”.

Art. 11

The procedure for correcting the errors contained in the annual financial statements and the annual accounting reports submitted by economic operators and legal entities without patrimonial purpose, approved by the Order of the Minister of Public Finance no. 450/2016, published in the Official Gazette of Romania, Part I, no. 274 of 12 April 2016, as subsequently amended and supplemented, shall also apply to interim financial statements prepared by economic operators in accordance with the provisions of the Accounting Law no. 82/1991, republished, as subsequently amended and supplemented, and submitted by them to the territorial units of the Ministry of Public Finance

Art. 12

In the Accounting Regulations on simple bookkeeping, approved by the Order of the Minister of Public Finance no.170 / 2015, published in the Official Gazette of Romania, Part I, no. 139 of 24 February 2015, point 1 (b) of Chapter I is amended as follows:

The mentioned regulations shall be applied by:

  1. natural persons and associations without legal personality, whose income is subject to income tax in accordance with the provisions of Law no. 571/2003 regarding the Fiscal Code, as subsequently amended and supplemented (Fiscal Code), whose annual net income is determined in real system, based on the accounting data, and is obtained from the following sources

…………………………….

b)disposal of the use of goods;

[extract of Ordinance of the Finance Ministry (OMFP) no.170/2015]

“b) the disposal of the use of goods, including rental of real estate / apartments / rooms, by natural persons carrying out income-generating activities and whose annual net income is determined in real system, according to the Tax Code;”