Study on the Alignment of the Accounting Regulatory Framework on the IFRS for Credit Institutions in Romania

Abstract

Credit institutions have a key role in the financial system in the national economies, which means that the information provided by them through the financial statements can provide clues on the situation of the economy. On the other hand, we should acknowledge the impact of the activities of credit institutions on monetary statistics, such as the figures about monetary mass and crediting of the domestic private sector, all of them representing a concern of those who establish policies. It is known that normalization and harmonization of the Romanian accounting with international standards ensure that the financial statements of credit institutions to provide the necessary information to all categories of users in decision-making process, reflecting the differences on economic performance and at the same time, risks in the business environment. Regarding to the totally implementation of IFRS by the banking system, the Central Bank, in its capacity as regulator, it is obliged under the agreement concluded in 2009 with the IMF-EU-IFI as from 2012 to regulate the preparation of individual financial statements in accordance with IFRS. According to these reglementative changes, the financial situations related to credit institutions will be adjusted, where necessary, to approximate, in all significant aspects, with IFRS. In this article we plan to reveal which is the main retreatment's which must be made by credit institutions to harmonize individual accounts, in all significant aspects with IFRS. To reflect the differences between individual statutory financial statements and IFRS we analyzed the financial statements for the year 2010 for four credit institutions in Romania, chasing their impact on equity capital and net profit.