Financial and accounting assistance IFRS and OMF

As your organisation tackles the change related to transactions such as debt/ equity funding, divestitures, restructuring or even bankruptcy you are likely to encounter complex accounting and financial reporting challenges. Our Accounting Advisory team provides assistance on critical issues that may arise in these situations.

How we can help

Our team has deep knowledge of the emerging accounting rules and regulatory climate and we have extensive experience across different industries. We apply a disciplined, consistent methodology across the PwC network. This enables us to maintain our focus on helping you manage change, safeguard compliance, and optimise the quality and efficiency of your accounting function, no matter where or how you do business. Here are a few of the services we can help you with:

Our Romanian GAAP specialists can assist you with the following matters:

Accounting consultancy services in Romanian GAAP;
Assistance with preparation of financial statements in accordance with Romanian GAAP;
Identification, proposals and reviews of adjustments between Romanian GAAP and IFRS;
Business combinations and transformations in accordance with Romanian legal requirements;
Advisory services on process of consolidation, combination;
Design accounting manuals and policies in accordance with Romanian GAAP.

Consolidations

The preparation of the consolidated financial statements is time consuming and requires work with a large volume of unstructured data. Implementation of appropriate procedures and tools is becoming a necessity in order to keep a systematic control of processes.

Our specialists can assist you with the following matters:

Support during preparation of consolidated financial statements;
Implementation of e-tools that will facilitate smooth consolidation processes;
Optimization when running the consolidation;
Accounting advisory for specific transactions.

Assistance in solving complex large data issues regarding fixed assets:

Scenarios regarding changes in valuation method: re-build the fixed assets register on cost model, starting with the revaluation model;
Physical inspection of fixed assets, labelling, reconciliation with the register and proposed corrections;
Reconstruction of fixed assets registers after data losses;
Development of fixed assets capitalisation procedures and assistance in implementation.

Technological losses

Assistance in developing internal standards for technological losses which represent a fiscal requirement for the deductibility of losses expenses, with the following benefits for production companies:

Minimisation of VAT and corporate income tax risks related to technological losses, damaged goods and missing inventories;
Explanation for inventory minuses;
Clear documentation of losses incurred at the company level;

Technological losses documentation can be used over several financial periods. Updates are required only when significant changes occurs.

International accounting standards are complex and are subject to frequent changes of its interpretation. Also, Romanian accounting GAAP often fails to provide clear instructions and leaves a user in uncertainty and “grey areas”.

Our specialists can assist you with the following matters:

Assistance with providing constant, timely and practical accounting implementation in IFRS and Romanian GAAP;
Preparation of accounting policies, accounting schemes and complete accounting manuals for individual companies;
Preparation, revision and unification of processes and accounting procedures for company;
Assistance in Group reporting packages preparation (outsource/co-source the internal reporting function);
Development the monthly closing procedures with a clear structure of deadlines and personnel responsibility flow;
Solutions for reducing the number of days spent on monthly closing;
Custom defined and configured reporting forms;
Outsource entirely or partially closing process procedures (monthly or annually).

Preparing IFRS financial statements
Implementation of new standards
Accounting Advisory Services
Deferred tax-related services

Preparing IFRS financial statements

Have you encountered any of the following situations?

You are required or have the option to prepare IFRS-based financial statements but do not know exactly how the transition may affect:

the financial statements;
key performance indicators;
tax liabilities;
the allowable dividends;
accounting systems and processes;
other areas of everyday operations (e.g. human resources).

Management needs assistance in the preparation of the first IFRS financial statements:

due to a lack of resources;
due to a lack of specialist IFRS expertise;
in selecting the most suitable mandatory exceptions and optional exemptions under IFRS 1 and assessing their impacts;
in connection with IFRS disclosures.

You need to prepare an IFRS-based reporting package.

We can assist you with the following:

Conduct a complex accounting impact assessment on the application of IFRS (assess the impacts of the transition to IFRS and decisions required in the transition strategy);
Analyse the taxation implications of the transition to IFRS;
Consult on the practical application of accounting policies;
Establish an appropriate IFRS accounting policy or revision of the company’s existing accounting policy;
Assess quantitative and qualitative impacts of changes in accounting policies;
Assist in the preparation of the first IFRS financial statements;
Analyse how implementing IFRS affects business processes and systems;
Train staff directly and indirectly involved in the transition to IFRS.

Implementation of new standards

Applying newly issued International Financial Reporting Standards may result in substantial changes from existing accounting practices.

The adoption of IFRS 15 ‘Revenue from contracts with customers’ issued on 28 May 2014, IFRS 9 ‘Financial instruments’ issued on 24 July 2014 and IFRS 16 ‘Leases’ issued on 13 January 2016, may place a significant burden on preparers of IFRS financial statements.

The implementation of new standards represents a real challenge not only for finance teams but also impacts many areas across organisations.

Have you considered any of the following questions?

Which new standards do I need to implement?
How will the new standard(s) affect existing bookkeeping and accounting processes?
Do I need to adjust the sub-ledgers to comply with the new accounting requirements?
Do the current accounting and ERP systems require development?
How will the new standard affect the company’s key performance indicators?
How will the new standard affect the company’s business activities?

We can assist you with the following:

Conducting an impact assessment, based on the company’s transactions, of how the accounting treatment is expected to change;
Consulting on how to account for significant transactions based on industry practice;
Assessing the company’s planned transactions, identifying the most relevant circumstances that determine the accounting treatment, and assisting the company by providing an impact assessment of any changes in these circumstances;
Assisting in the analysis of data generated by ERP systems and implementing solutions that comply with the new standards.

Accounting Advisory Services

In today’s rapidly changing economic, legal and tax environment, accountants are finding an increasing number of complex accounting issues under either (or both) the Romanian GAAP (OMFP) or IFRS (International Financial Reporting Standards) that require extensive expertise.

Have you faced any of the following questions?

How to account for the acquisition of new portfolios or business lines?
Is it possible to maintain the company’s books in the currency determined by the group?
How to account for leasing arrangements (in the case of finance and/or operating leases)?
Is it possible to include leases in non-lease agreements?
When and how to account for financial support provided/received?
When is it necessary to recognise a provision and in which cases is it optional to record a provision?
How to treat a transformation from an accounting perspective? How will a transformation affect the financial statements?
How to account for discounts under the Romanian GAAP (OMFP) and under IFRS? What impact could it have on revenues?

We can assist you with the following:

Establish the accounting policy most suited for the company based on its activities, review or update the company’s existing accounting policy;
Consultation on the accounting of complex transactions based on industry practice;
Accounting support including verbal discussion of accounting issues, which provides an opportunity to clarify issues in a flexible manner;
Present possible accounting treatments of specific transactions in a written advisory letter.

Deferred tax-related services

In many cases, accounting records need modification due to errors arising from the accounting for income tax, which often causes material errors in financial statements. The changing global operational environment and recent amendments to the Romanian taxation regulations have resulted in an increased need to verify the increasingly complex calculation of deferred tax balances.

What sort of questions might arise when calculating deferred tax?

How is deferred tax calculated using the balance sheet method?
What sort of practical problems might we face when calculating deferred tax for the first time?
Which tax rate should be applied when calculating deferred tax?
How do you verify that all items have been taken into consideration?
When is it possible to recognise deductible temporary difference and/or loss carry-forward as a deferred tax asset?
How is the effective tax rate calculated?

We can assist you with the following: