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Moldova Adopts New Financial Reporting Regulations

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The Parliament of the Republic of Moldova has adopted a new organic law on financial accounting, aimed at establishing a single regulatory framework for financial reporting in the country. The law came into effect on April 27, 2007, and was amended on April 27, 2023.

Scope

The law applies to all legal entities and physical persons engaged in business activities, including:

  • Non-profit organizations
  • Public organizations
  • Notaries
  • Lawyers
  • Mediators
  • Authorized managing directors
  • Bureaus founded by them
  • Representations and branches of foreign companies registered in Moldova, regardless of their sphere of activity, type of property, or form of business.

Key Concepts

The law defines several key concepts, including:

  • Internal audit
  • Ledger
  • Financial accounting
  • Method of charges
  • Cash method of accounting
  • Managerial accounting
  • Source document
  • Element of accounting
  • Subject of public interest

It also sets out the definitions of various types of companies, including those with limited and unlimited liability.

Financial Accounting and Reporting

The law requires that all subjects maintain accurate and reliable financial records, using either a double-entry or single-entry system of financial accounting. It also mandates the preparation of annual financial reports, which must include an audit certificate if an audit is required.

Requirements for Financial Statements

  • Format and content of balance sheets
  • Income statements
  • Cash flow statements

Internal Control and Auditing

The law emphasizes the importance of internal control systems in ensuring the accuracy and reliability of financial information. It also requires that all subjects undergo regular audits to ensure compliance with the law and the accuracy of their financial reports.

Accounting Standards

The law recognizes International Accounting Standards (IAS), National Accounting Standards (NAS), and National accounting standards in the public sector (NSBUPS) as the basis for financial reporting in Moldova. It also requires that all subjects adhere to these standards, which are developed and approved by the Ministry of Finance.

Effective Date

The law came into effect on April 27, 2007, and was amended on April 27, 2023. All subjects engaged in business activities in Moldova must comply with its requirements and regulations.