Adoption of IFRSs in Europe Effective in 2005
Romania became an EU Member State on 1 January 2007.
In June 2002, the European Union adopted an IAS Regulation requiring European companies listed in an EU securities market, including banks and insurance companies, to prepare their consolidated financial statements in accordance with IFRSs starting with financial statements for financial year 2005 onwards. EU countries have the option to:
- Require or permit IFRSs for unlisted companies.
- Require or permit IFRSs in parent company (unconsolidated) financial statements.
- Permit companies whose only listed securities are debt securities to delay IFRS adoption until 2007.
- Permit companies that are listed on exchanges outside of the EU and that currently prepare their primary financial statements using a non-EU GAAP (in most cases this would be US GAAP) to delay IFRS adoption until 2007.
The European IAS regulation applies not only to the 27 EU Member States but also to the three members of the European Economic Area (EEA) – Iceland, Liechtenstein, and Norway.
Romania became an EU Member State on 1 January 2007. Consequently, Romanian companies listed in an EU/EEA securities market follow IFRSs
since 2005. In July 2010, the European Commission published the results of a survey of the 27 EU member states and the 3 EEA member states regarding the four options above. For information on each country's plans, click to download:
The European Commission has adopted the following wording for use in the notes to the accounts and in the audit reports of companies subject to EU Regulation 1606/2002/EC (the 'IAS regulation'):
- "in accordance with International Financial Reporting Standards as adopted by the EU" or
- "in accordance with IFRSs as adopted by the EU".
Companies may also state, in a footnote, compliance with IFRSs as adopted by the IASB, if that is the case.
In September 2011, the European Commission services published a report an update on the extent to which certain options included within the
Accounting Directives have been incorporated into the law of the Member States and EEA countries. Please click for
access to the report (PDF 816k, link to EC website).
The accounting framework in Romania is governed by the following main laws:
- Accounting Law 82 / 1991 (revised), indicating the requirements for the general accounting framework for Romanian entities;
- Order of Ministry of Public Finance 907/27.05.2005 ('OMF 907') regarding the conformity of the accounting regulations with International Financial Reporting Standards ('IFRS') and respecting conformity of accounting regulations with EU Directives;
- Order of Ministry of Public Finance 1752 /17.11.2005 ('OMF 1752'), covering financial reporting and related accounting requirements. The OMF 1752 was prepared to reflect relevant European Directives in force, namely Directive IV for stand-alone financial statements and Directive VII for consolidated financial statements;
- Order of Ministry of Public Finance 2001/22.11.2006 ('OMF 2001'), modifies the OMF1752;
- Order of Ministry of Public Finance 1121/4.07.2006 ('OMF 1121'), regarding the application of IFRSs.
The OMF 1752 which is the the standard applicable to all the companies (not applicable to banks and financial institutions) does not make direct reference to IFRSs but to the 4th and 7th EU Directives.
The OMF 907 regarding the application of IFRSs refers to listed companies, credit institutions, insurance companies, subsidiaries of groups applying IFRSs that are required to apply IFRS, without mentioning about the preparation of the financial statements compliant with EU Directives. OMF 1121 completes the OMF 907 through the statutory obligation to prepare financial statements compliant with the EU Directives for all the companies in addition to the preparation of the IFRS financial statements (either mandatory or optionally applied).
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