ORDER OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF MOLDOVA

of March 12, 2019 No. 48

About approval of changes to the Order of the Minister of Finance No. 118/2013 of year

List of amending documents

Based on Item b) parts (1) article 8 of the Law on financial accounting and the financial reporting No. 287/2017 (Art. No. 1-6, 22) and for the purpose of transposing of the Directive 2013/34/EU of June 26, 2013 on the annual financial reporting, consolidated financial statements and the accompanying reports of certain types of the companies, the making amendment to the Directive 2006/43/EU of the European Parliament and Council and the canceling Directive of Council 78/660/EEC and 83/349/EEC published in the Official magazine of the European Union No. L 182/19 of June 29, 2013 is published in the Official monitor of the Republic Moldova, 2018, and enhancements of content of National accounting standards I ORDER:

1. Approve changes to the Order of the Minister of Finance No. 118/2013 of according to appendix.

2. Declare invalid the Order of the Minister of Finance on accounting treatment for expenses on replacement of autotires and rechargeable batteries of vehicles No. 87/2004 of. (Official monitor of the Republic of Moldova, 2005, Art. No. 1-4, 1).

3. This order becomes effective since January 1, 2020.

Appendix

to the Order of the Minister of Finance No. 48 of March 12, 2019

Changes to the Order of the Minister of Finance No. 118/2013 of year

In the Order of the Minister of Finance No. 118/2013 of on approval of National accounting standards (The official monitor of the Republic of Moldova, 2013, Art. No. 177-181, 1224) to make the following changes:

1. In Item 1 1) of the order of the word "NSBU Investment Real Estate" to exclude the subitem.

2. "SUBMISSION of FINANCIAL STATEMENTS" to state the NATIONAL ACCOUNTING STANDARD in the following edition:

NATIONAL ACCOUNTING STANDARD "SUBMISSION OF FINANCIAL STATEMENTS"

Introduction

1. This standard "Cash flow statement" is developed on the basis of the Directive 2013/34/EU, Conceptual bases of the financial reporting, IFRS (IAS) 1 "Accounts presentation" and IFRS (IAS) 7.

Purpose

2. The purpose of this standard consists in establishment of format and procedure for creation of individual financial statements (further - financial statements).

Coverage

3. This standard regulates procedure for creation and representation complete, simplified and condensed financial statements of the subjects applying National accounting standards.

4. This standard does not regulate procedure for creation of financial statements:

1) subjects of public interest and other subjects applying IFRS (IAS) 1 "Accounts presentation" and (IAS) 7 "Cash flow statement");

2) non-profit organizations and representations of nonresident subjects (Methodical instructions about features of financial accounting in non-profit organizations and representations of subjects - nonresidents);

3) budget bodies / organizations (Norma, established by the Ministry of Finance);

4) savings and loan associations (Methodical instructions about features of financial accounting and submission of information in financial statements of savings and loan associations). Determinations

5. In this standard the used concepts mean:

Cash flow - receipts and/or disposals of money and cash documents.

Changes of equity - increase and reduction of elements of equity.

Financial results - the relation between the income and the subject's expenses provided in the report on profit and losses.

Financial position - the relation between the assets, equity and obligations of the subject provided in balance / the reduced balance.

Book value - the cost at which the asset is recognized balance / the reduced balance, after deduction of cumulative depreciations and impairment losses.

Purpose and structure of financial statements

6. The purpose of financial statements consists in submission of information necessary for adoption of economic decisions wide range of users, such as: owners (participants, shareholders, founders, members), creditors, clients, workers, public bodies and public. For implementation of this purpose financial statements provide information about:

1) assets;

2) equity;

3) obligations;

4) income and expenses;

5) cash flow.

7. Depending on categories of the subjects provided in the Law on financial accounting and the financial reporting and own information requirements the subject can constitute:

1) complete financial statements; or

2) the simplified financial statements; or

3) condensed financial statements.

8. Complete financial statements include:

a) balance;

b) report on profit and losses;

c) report on changes of equity;

d) cash flow statement;

e) explanatory note.

9. The simplified financial statements include:

a) balance;

b) report on profit and losses;

c) explanatory note.

10. Condensed financial statements include:

a) the reduced balance;

b) the reduced report on profit and losses;

c) explanatory note.

Format and contents of financial statements General rules

11. Financial statements represent single set and are constituted for each accounting period according to the formats provided in appendices to this standard.

12. Financial statements are constituted according to the general provisions provided by the Law on financial accounting and the financial reporting.

13. Information from financial statements shall correspond to the high-quality fundamental and increasing usefulness of information characteristics provided by the Law on financial accounting and the financial reporting.

14. Financial statements are constituted on the basis of accounting information after reflection of results of inventory count for confirmation of availability and condition of assets, equity and obligations.

15. Financial statements shall be allocated and isolated from other information provided in the same document, for example, in the annual statement of the subject or in the prospectus of the issue of securities.

16. The subject shall identify accurately financial statements and select the following information:

1) the name of the subject and the other identifying elements;

2) reporting date or the period covered by the financial statement;

3) core activity;

4) pattern of ownership;

5) form of business;

6) unit of measure.

17. The mistakes revealed in case of creation of financial statements improve according to NSBU "Accounting Policy, Changes in Accounting Valuations, Mistakes and Subsequent Events".

18. Creation and submission of financial statements includes the following stages:

1) performance of works, the financial statements preceding creation, such, as: joint inventory of assets, equity and obligations, write-off of the expenses and deferred revenues relating to the accounting period, determination and reflection of exchange currency differences, creation of adjusting entries, determination of the current share of non-current assets and long-term obligations, closing of managerial accounts, etc.;

2) filling of formats of financial statements;

3) creation of the explanatory note to financial statements;

4) approval, signing and submission of financial statements;

5) reformation of balance / the reduced balance.

Balance / the Reduced balance

General provisions

19. The balance / the reduced balance reflects financial position of the subject and includes information on the remaining balance which is available on reporting date on:

1) to assets - economic resources, identifiable and controlled by the subject as result of last economic facts from which use receipt of economic benefits is expected;

2) to equity - residual in the subject's assets after deduction of obligations;

3) to obligations - this debt of the subject which arose owing to the last economic facts repayment (write-off) of which will lead to disposal of the resources containing economic benefits.

20. In balance / the reduced balance the result of assets is equal to result of equity, obligations and provisions.

21. Assets are provided in balance / the reduced balance according to the procedure of increase in their liquidity, and the obligation - according to the procedure of increase in term of their repayment.

22. Representations of assets as non-current assets or current assets depends on their appointment (for example, the advance payments issued on acquisition of non-current assets are reflected as a part of these assets irrespective of the term of provision of advance payment).

23. If asset or liability are connected more than with one element of structure of balance / the reduced balance, its communication with other elements is reflected in the explanatory note to financial statements.

24. Depending on liquidity degree assets are subdivided on:

1) the current assets representing assets which it is expected that will be spent during normal cycle of activities are implemented or received within 12 months, or the representing money;

2) non-current assets which include all other assets, except for current assets.

25. The normal cycle of activities of the subject represents period of time from the moment of acquisition of the assets intended for conversion until their transformation into money. When for the subject this cycle is not determined, its duration is considered 12 months. Inventories which are sold, spent, processed and receivables repaid as part of normal cycle of activities during the period exceeding 12 months from reporting date are considered as current assets (for example, raw materials, materials, work in progress which requires endurance and storage on the wine-making subject, the fruit and juice sulphited or refrigerated at cannery).

26. Depending on repayment period of the obligation share on:

1) the current obligations which include obligations which are expected that will be settled or written off within 12 months after reporting date;

2) the long-term obligations including everything other obligations, except for the current obligations.

27. The commercial obligations and obligations to employees reflected in structure of normal cycle of activities are the current obligations even if they can be extinguished during the period exceeding 12 months after reporting date.

28. On reporting date the subject determines the current share of non-current assets and long-term obligations which is reflected in balance / the reduced balance, respectively as a part of current assets and/or the current obligations.

29. Receivables, money and obligations in foreign currency are recalculated and reflected in balance / the reduced balance according to NSBU "Exchange Currency and Amount-based Differences".

Balance

30. The balance is made according to the format provided in appendix of 1 this standard.

Assets

31. On line 010 "Incomplete intangible assets" book value of the acquired intangible assets or intangible assets in the course of their creation and preparation for proper use, and also the intangible assets interconnected with other non-current assets on which work on their preparation for proper use which is determined according to NSBU "Non-current Intangible and Tangible Assets" is required is reflected.

32. On line 020 "Intangible assets in operation" book value of the intangible assets put into operation which is determined according to NSBU "Non-current Intangible and Tangible Assets" is reflected. In lines 021-024 book value of classes of intangible assets is represented: concessions, licenses and trademarks; copyright and security documents; software and other intangible assets.

33. On the line 030 "Goodwill" the goodwill carrying amount which is determined according to NSBU "Non-current Intangible and Tangible Assets" is specified.

34. On line 040 "The advance payments issued for intangible assets" the amount of the long-term and current advance payments issued for acquisition of intangible assets is reflected.

35. On line 050 "All intangible assets" the total cost of intangible assets determined as is specified: p. 010 + p. 020 + p. 030 + p. 040.

36. On line 060 "Incomplete non-current tangible assets" book value of the arrived non-current tangible assets or non-current tangible assets in the course of creation and preparation for use as fixed assets which is determined according to NSBU "Non-current Intangible and Tangible Assets" is reflected.

37. On the line 070 "Parcels of land" book value of own parcels of land received in financial leasing and/or economic maintaining, which are in process of preparation for proper use and in operation and also value of the rights of use of the parcels of land is reflected.

38. On the line 080 "Fixed assets" book cost of own fixed assets received in financial leasing and/or economic maintaining, which are in operation including value of the rights of use of buildings which is determined according to NSBU "Non-current Intangible and Tangible Assets" is specified. In the lines 081-086 book value of property, pland and equipment classes is specified: buildings; special constructions; machines, equipment and technical installations; vehicles, furniture and stock and other fixed assets.

Example 1. On reporting date the subject has the following information:

- original cost of fixed assets - 4500000 lei, including buildings - 2500000 lei, stock and furniture - 2000000 lei;

- accumulated depreciation - 870000 lei, including buildings - 570000 lei, stock and furniture - 300000 lei;

- impairment losses of buildings - 390000 lei.

According to accounting policies subsequent assessment of non-current tangible assets is performed according to the model based on cost.

On the basis of data of example the subject will reflect on the line 080 "Fixed assets" of balance total carrying amount of fixed assets in the amount of 3240000 lei (4500000 lei - 870000 lei - 390000 lei), and on line 081 - book value of buildings in the amount of 1540000 lei (2500000 lei - 570000 lei - 390000 lei) and on line 085 - book value of stock and furniture in the amount of 1700000 lei (2000000 lei - 300000 lei).

39. On line 090 "Mineral resources" book cost of mineral resources which is determined according to NSBU "Non-current Intangible and Tangible Assets" is reflected.

40. On line 100 "Non-current biological assets" book value of the working and productive cattle (bulls, horses, cows, sheep, pigs, goats, etc.), the incomplete and being in operation long-term plantings (gardens, vineyards, grape and fruit nurseries, etc.) which is determined according to NSBU "Features of Financial Accounting in Agricultural Industry" is reflected.

41. On line 110 "Investment real estate" book cost of the investment real estate which is determined according to NSBU "Non-current Intangible and Tangible Assets" is reflected.

42. On line 120 "The advance payments issued for non-current tangible assets" the amount of the long-term and current advance payments issued for acquisition (purchase, creation/construction, etc.) non-current tangible assets is reflected.

43. On line 130 "All non-current tangible assets" the total cost of non-current tangible assets which is determined as is specified: p. 060 + p. 070 + p. 080 + p. 090 + p. 100 + p. 110 + p. 120.

44. In the lines 140 "Long-term financial investments in not affiliated parties" and 150 "Long-term financial investments in the affiliated parties" the amount of securities, shares, the granted loans and other financial investments into not affiliated and affiliated parties with repayment period (possible ownership) more than 12 months which is determined according to NSBU "Receivables and Financial Investments" and NSBU "Affiliated Parties and Agreements of Particular Partnership" is specified. In the lines 151-154 share value and share, the granted loans including relating to interests of participation, and other long-term financial investments in the affiliated parties is represented, respectively.

45. On line 160 "All long-term financial investments" the total cost of long-term financial investments determined as is specified: p. 140 + p. 150.

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