Accounting ledgers and supporting documents will be archived for five years

Law No. 36/2023 brings the following amendments to the Accounting Law no. 82/199 and the Government Emergency Ordinance no. 28/1999 regarding the obligation of economic operators to use electronic fiscal marking machines.

• The Law 36/2023 provides that the mandatory accounting ledgers and the supporting documents, used in the bookkeeping process will be archived 5 years, calculated from July 1, of the subsequent year of the financial closing year when these were prepared, including the payroll statements, instead of 10 years as it is stipulated by the current law. The same condition is applicable to the special register and the daily closing fiscal report, excepting. the entities, which use the electronic fiscal marking machines that do not incorporate the printing device. Ø
• Entities that use automatic data processing will have the obligation to storage the data on the technical support devices 5 years, calculated from July, 1 of the subsequent year of the financial closing year when these were prepared, respectively.
• Law No. 36/2023 also amends GO no. 28/1999 regarding the obligation of economic operators to use electronic fiscal marking machines. The entities, which use electronic fiscal marking devices, and their fiscal memory is full, or need to be replaced being out-of-order, disposed or no longer used for various reasons, are obliged to ensure the preservation and archiving of the fiscal records for 5 years calculated from July, 1 of the subsequent year of the financial closing year when these were prepared.

Accounting Regulations regarding individual annual financial statements and consolidated annual financial statements, approved by OMFP no. 1.802/2014, with subsequent amendments and additions.

Minister of Finance Order no. 4.291/2022 published in the Official Gazette no. 18 / January 2023, applicable starting with the financial statements related to the financial year 2022, brings some new accounting aspects, as follows:

• Capitalization of borrowing costs

An entity must suspend capitalization of borrowing costs during extended periods when does not actually work on the long – cycle asset manufacturing. An entity may incur borrowing costs during an extended period when the entity suspends its necessary activities for preparing the assets for use or sale. Capitalization of borrowing costs is not interrupted during the period when the entity performs significant technical and administrative work or when a temporary postponement is a necessary part of the process of preparing an asset for its intended use or for sale.  The provisions relating to the interruption of the capitalization of borrowing costs apply starting with the annual financial statements relating to the financial year of 2022, if the effect of the change in the accounting policy are set up by the date when those annual financial statements are authorized for issuance. Otherwise, these provisions after January 1, 2023. The entities that chose a financial year other than the calendar year apply these provisions starting with the first annual financial statements concluded on a date after January 1, 2023.

• Advances from customers

The amounts received from the customer before the entity transfers a good or service to the customer is booked as a debt to the customer (account 419 “Advances from customers”). The entity incurs a liability to the customer, which will be settled and the revenue recognized, respectively, when the entity transfers those goods or services and thereby fulfills its contractual obligation.

• Deferred revenues

An entity might collect a non-refundable advance from the customer at or near the start of the contract If the advance represents an advance payment made by a customer for services, which will be provided in a future period, the corresponding amount is recognized in account 472 “Deferred revenues”, and the revenue will be recognized when the respective services will be provided. If the advance does not refer to future services, the amount collected from the customer is recognized as the revenues of the period.

• Dividends distribution during the financial year

Entities that receive dividends during the financial year reflect them against the liability (Journal Entry 461 Sundry debtors/analytical account = 467 Liabilities related to interim distributions of dividends).

New accounts in the General Chart of Accounts

• 467 Debts related to interim dividend distributions
• 6053 Expenses regarding the consumption of natural gas
• 6058 Expenses with other utilities
• 694 Profit tax expenses resulting from settlements within the fiscal group in the field of profit tax
• 794 Income from profit tax resulting from settlements within the fiscal group in the field of profit tax, as well as accounts class “79” Income from profit tax
• the name of accounts class “60xx” is changed into: Expenses regarding stocks and other consumption, and the name of account 605 is changed into: Expenses regarding utilities.