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UNIVERSITY HYPERION BUCHAREST - ROMANIA

Lecturer Doctor Ustinia Rachita

Most recent amendments to the Romanian financial accounting1

The most important completions and classifications on lease-back operations

accounting (in point 90). The lease-back operation means the long term sale-buy

operation of an asset, followed immediately by a leasing operation.

1. The lodger (buyer) proceeds as follows:

For the financial leasing

The transaction carried out is a financing operation, and not a sell- buy one, and the asset

is further maintained registered in the book keeping with the value existing previously the

leasing operation, within the same depreciation system used.

Accounts:

5121

Bank accounts in Lei

= 167

Other financing operations

and assimilated debts

x x x lei

a) For the operational leasing

The operation is carried on the two components, as follows:

- long term assets selling followed by registering the asset or the amounts received or

to be received within the accountings:

- according to the operational leasing agreement, periodically are registered the dues

(the rent) coming from leasing (the leasing agreement is outside the accounting

registered in the account 8031Rented corporeal immobilizing.

2. Direct costs assignable to material immobilizations (in point 92) which are effected

when accumulated, may be:

- material expenses;

- expenses with the employees salaries, contributions related to these;

- costs related to the location arrangement;

- initial costs for handling and delivery;

- costs related to installation and assembling;

- design expenses and for getting the licenses;

- professional fees paid to the lawyers and professionals, etc.

1 Order of the Minister of Economy and Finance no. 2374/12.XII.2007.

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3. The replacement of some component parts of complex goods set up of kits (in point

100), subsets and spare parts of high value. In these circumstances the component parts

which have to be replaced are taken out of use at the remaining value.

According to the way the new component has been purchased, following the replacement

the cost of the new component part is registered within the current assets.

Accounting register:

212

Buildings

= 401

Suppliers

(cost of the new component part)

x x x lei

4. The category of goods in stocks and assets with long manufacturing cycle intended to

be sold (in point 124), for example, residential ensembles and complexes.

5. The evaluation of the purchased stocks paid in currency for which the invoice is

received later (in point 152), is performed based on the Romanian Standard, using the

exchange rate valid on the reception day.

6. When treasury advances have been granted (in point 171) and they have not been

reimbursed till the tax year closing, the companies have to register these advances in the

debtors account.

Book keeping:

461

Different debts

= 542

Treasury advance

x x x lei

Further there are presented some accounting register modifications of the book

keeping for operations concerning the accounting result distribution (in point 222) at the

end of the tax year. In chronological terms, this type of operations are carried out as

follows:

Book keeping:

129 Profit distribution = 106 Reserves x x x lei

In the balance sheet issued (on 31 December), the accounts 121 Profit or loss and 129

Profit allotment have a balance. At the beginning of the year the two accounts are

closed, and the resulting value remaining not distributed after the allotment to the legal

reserves is transferred to the account 117 Result carried over.

Book keeping:

121 Profit or loss = %

129 Profit allotment

117 Result carried over

x x x lei

x x x

x x x

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Following the approval of the General Meeting of Shareholders, the profit is registered

and distributed as follows:

Book Keeping:

117 Carried over

result

= %

129 Dividend to be paid

106 Reserves

x x x lei

x x x

x x x

Please note the fact that the profit obtained by the company during the closing tax year is

not distributed on kinds of assignment until the accounting loss accumulated during the

previous financial years are not covered from the profit of the tax year and the carried

over profit (account debt 117), from reserves, capital primes and social capital, according

to the decision of the General Meeting of Shareholders in the spirit of the legal

provisions, are corroborated the provisions of the Law on accounting No. 82/1991,

republished and modified by the Order of Minister of Public Finance no. 1752/2005,

republished in 2007 on approving the accounting regulations according to the UE

Directives.

10 January 2009

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UNIVERSITY HYPERION BUCHAREST - ROMANIA

Lecturer Doctor Ustinia Rachita

Most frequent accounting mistakes

A frequent mistake is made when setting the base for the calculation of the net profit, by

omitting the not deductible expenses registrations. Generally, the base for computing the

profit tax is calculated as (Incomes Expenses) x 16%, but the law specifies the expenses

classes which are tax exempt. The most important expenses categories of this kind are:

(i) expenses for goods of stock kind found missing during the budgetary control,

(ii) expenses for VAT corresponding to the previous ones,

(iii) protocol expenses.

Direct registering in the expenses account of the stackable materials (fuels, spare parts,

consumption materials, inventory goods) before closing the month book keeping is an

absolutely unhappy idea, because at the end of the month people authorized by the

company will submit to the accounting department the respective documents in proof for

the concerned month. When the registration has been already made, it is possible that the

stock be not yet used up.

1. Example of an accurate registering

%

3022 Fuels

4426 Deductible VAT

= 401 Suppliers

x x x lei

x x x

x x x

The initial registering in the account corresponding to the fuel stocks for example, and

then, at the end of the months issuing the accounting note corresponding to the actual

consumption; actual consumption:

Accounting register:

= 3022 Fuels x x x lei

2. Example of an inappropriate accounting register

Accounting register:

6022

Expenses related to the fuel

4022 .

=

=

401 Suppliers

401 Suppliers

x x x lei

x x x lei

Direct registration within expenses although it is possible that the stock be not yet

completely used up and in fact there is a fuel stock.

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The advance receiving amounts have to include also the VAT corresponding to the

respective registering. If, for example, it has been received an amounts of 119 Lei for this

month representing the value of a delivery quantity that will be received during the next

month, the inappropriate practice is the following:

5311 Cash in Lei = 411 Clients 119 lei

The book keeping does not include the VAT corresponding to the operation, whole

amount is registered within the Client account. The proper accounting notes

corresponding to the receiving amount are:

Book keeping:

5311 Cash in Lei = 419 Clients-creditors 100 lei

As when someone pays an amount, but the company did not yet deliver the goods, this

person is a Client- Creditor, and the company has an outstanding debt towards them.

10 January 2009