Replacing Romanian accounting standards (RAS) by international accounting standards (IFRS) should be one of companies' priorities, in the context where all EU countries will have to adopt international reporting regulations, stated British expert Nigel Sleigh-Johnson, head of Financial Reporting with UK's Institute of Chartered Accountants and a member of the European Federation of Accountants.
"It's never too early to start planning out international reporting. Some companies have delayed its application, but it's not too late in their cases, either. The conversion process must be approached as any other major project, not just technically, in terms of accounting, but also as a process that has a leader and some resources," said Nigel Sleigh-Johnson at the event "Current reporting standards: Why IFRS", organised by ZF in partnership with Oracle.
International accounting standards ensure improved transparency and comparability, but Romania has not adopted this system, yet.
Instead, foreign companies' subsidiaries are bound to international reporting to parent companies, besides the Romanian reporting required by the Finance Ministry. Adopting IFRS could draw investors on the stock exchange, says Nigel Sleigh-Johnson.
"IFRS adoption makes information more credible, performance is comparable at an international level. I believe there would be a capital inflow at the Romanian Stock Exchange should all companies report financial results in line with IFRS".
Companies pay below 1% of turnover in the process of implementing the new international accounting standards, according to a survey due to be published by United Kingdom's Institute of Chartered Accountants.
With a view to implementing IFRS, companies' expenses are mainly related to drawing in personnel handling the process. For an average firm, the process of implementing IFRS lasts around two years, but Sleigh-Johnson considers the process should be planned out three or four years ahead.
The International Accounting Standards Board (IASB) is currently drawing up a project to simplify IFRS for small, unlisted companies.
Over 80% of small, unlisted companies may be exempt from adopting IFRS, according to the British accountant.
To minimise financial reporting efforts, Oracle proposes Oracle Hyperion Financial Management financial consolidation and reporting solution.
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