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Albania's statutory framework for accounting
12. In order to address shortcomings in the previous accounting law, a new accounting law was recently enacted. The Accounting Law (1993), complemented by a General Accounting Plan which provided detailed guidance including a chart of accounts, outlined the applicable accounting and financial reporting requirements for all business entities in Albania. This law was repealed when the new Law on Accounting and Financial Statements (hereinafter “Accounting Law (2004)”) became effective on January 1, 2006. The new law requires the use of IFRS for the preparation of the legal and consolidated financial statements of public interest entities and National Accounting Standards (NAS) for the preparation of all other financial statements. However, the entry into force of Article 4 of the new law, which establishes the accounting standards applicable to business entities, has been postponed until January 1, 2008 due to problems with the translation of IFRS and the finalization of National Accounting Standards (NAS). As a result companies will continue to apply the standards in the General Accounting Plan, which now has no legal basis....
17. ...The Accounting Law (2004) requires listed entities (none in Albania), large unlisted entities (yet to be defined in secondary legislation), and financial institutions to prepare their legal entity and consolidated financial statements according to IFRS. All other corporate sector entities must prepare their financial statements in accordance with NAS drafted by the National Accounting Council (NAC) and approved by the Minister of Finance. The scope of application of IFRS has become more proportionate with the new Accounting law (2004); however it goes somewhat beyond the required use of IFRS under the acquis and could place significant demands on scarce resources. With the postponement of the entry into force of Article 4 of the new accounting law there is a need for greater clarity and guidance as to the accounting requirements applicable during the next two years, specifically the accounting standards to be used by SMEs, other large corporate sector entities and the insurance sector.
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