The Ministry of Finance (MF) published, on June 18, 2021, on the website of the institution, for consultation, a draft Order for the regulation of some accounting aspects, referring to the Romanian subunits belonging to legal entities based abroad.
The initiators specify, in the Report approving the normative act, that from the point of view of the accounting regulations regarding the individual annual financial statements and the consolidated annual financial statements, approved by Order of the Minister of Public Finance no. 1802/2014, with subsequent amendments and completions, permanent offices from Romania belonging to legal entities based abroad represent subunits without legal personality belonging to these legal entities and have the obligation to prepare annual financial statements and accounting reports required by Accounting Law no. 82/1991, republished, with subsequent amendments and completions.
If the legal entity with headquarters abroad carries out its activity in Romania through several permanent offices, the annual financial statements and accounting reports required by the Accounting Law no. 82/1991 are prepared by the permanent office designated to fulfill fiscal obligations, reflecting the activity all permanent establishments.
We remind you that with the issuance of OUG no. 13/2021 for the amendment and completion of Law no. 227/2015 on the Fiscal Code and the Accounting Law no. 82/1991, in the area of applicability of the accounting law are mentioned distinctly the foreign legal entities that carry out activity through a permanent establishment / several permanent establishments in Romania, as well as the foreign legal entities that have the place of exercising the effective management in Romania.
Considering this, according to the draft Order, the area of application of the accounting regulations approved by OMFP no. 1802/2014, with the subsequent modifications and completions, is completed with the following categories of entities:
– the permanent headquarters in Romania that belong to some legal entities with headquarters abroad;
– foreign legal entities that have the place of exercising the effective management in Romania.
Regarding the foreign legal entities that have the place of exercising the effective management in Romania, for this category of entities, the project establishes requirements regarding both the first year of application of the accounting regulations and after it.
Thus, for the first financial year of application the following are proposed:
– the information reported through the annual financial statements corresponds only to the current period, not being reported the information corresponding to the financial year preceding the reporting year;
– the annual financial statements can be prepared in any format provided by the accounting regulations;
– for the conversion of the balances of the balance sheet elements, existing at the end of the financial year, the exchange rate communicated by the National Bank of Romania, valid at the end of the financial year of the current period, is used;
– for the conversion of the turnovers corresponding to the operations carried out in the reporting financial year, the exchange rate from the date of the transactions / the average exchange rate of the reporting period is used.
From the second financial year for the application of the accounting regulations approved by OMFP no. 1,802 / 2014, with the subsequent amendments and completions, the provisions of the mentioned regulations are incidental to the foreign legal entities that have the place of exercising the effective management in Romania.
“The annual financial statements regulated by the draft order are financial statements with a special purpose, being intended to fulfill the obligations provided by the Fiscal Code”, the initiators specify.
In addition, the draft Order also proposes that the entities that have chosen, according to the law, a financial year different from the calendar year, to prepare the annual financial statements corresponding to the first financial reporting year at the end of the first financial year so chosen, starting after of January 1, 2021.