KPMG issues an illustrative model of applied IFRS financial statements

Responding proactively to client needs, KPMG in Romania has recognized that financial statements preparers in Romania need local language International Financial Reporting Standards (IFRS) illustrative financial statements and has launched the publication Illustrative Financial Statements under International Financial Reporting Standards.

As Aura Giurcaneanu, Audit Partner at KPMG enthused "This new publication is another ground-breaking first from KPMG in Romania. This helps people who want to understand IFRS better. By using "model" financial statements, we present the material as clearly as possible and in a way which makes it easy for readers to use. IFRS financial statements are a legal requirement in Romania (and in most other EU member states) for listed companies, but this publication also makes them more readily accessible to other companies wanting to apply best practice international reporting."

These Illustrative Financial Statements feature heavily in the KPMG courses on IFRS, which began on Friday 5 February 2010, at the company's headquarters in Bucharest. The aim of the series is to explain the new accounting rules which apply from 1 January 2010, in conformity with European Directives and which have been introduced into Romanian legislation under a recent Order of the Ministry of Finance (Order 3055/2009). The courses are aimed at representatives of leading Romanian companies, investors' associations and those with an interest in the latest developments in financial reporting.

The new requirements are presented in an interactive manner, to encourage discussions on the concrete issues faced by the participants, as well as on the example statements set out in the new KPMG publication. The courses are led by KPMG Audit and Accounting professionals and will also include presentations from Tax professionals on the fiscal implications of the new regulations. Participants are provided with course materials, and a copy of the new auditing rules, which will also indicate the modifications which these bring to the old ones (as set out under Order 1752/2005).

IFRS brings many benefits, as Giurcăneanu continues: "Historically, national accounting standards varied significantly, and with the advent of globalization this began to be a problem. It was very difficult to compare the financial performance of companies in different countries, or even to compare the performance of different parts of the same multinational. IFRS solves this because it is a single set of standards, which can be understood anywhere in the world. Hence, investors and others can analyse and interpret the financial performance of companies pan-globally."

As Angela Manolache, Senior Manager in KPMG in Romania's Audit and Accounting group points out: "Inevitably, the application of these new standards has created additional responsibilities for companies' accountants. However, companies which make the change sooner will be in a better competitive position. The time involved in the implementation of the standards will be an investment in the company's future, which in the long term will generate higher quality financial information and better communication with stakeholders."

As Adriana Lobdă, Director in KPMG Romania's Audit Services Department adds; "It is encouraging that more companies are deciding to use IFRS and are gaining the benefits of presenting their financial statements using a global standard. IFRS gives added transparency, making for better relations with investors, shareholders, customers and creditors in a global and national marketplace."

As Bill Bowman, Deputy Senior Partner at KPMG Romania concludes: "IFRS is a living framework of standards. Although there has been a period of stability in the application of new standards, the future will bring some changes. However, we at KPMG can support you with practical tools like these illustrative financial statements along with our deep knowledge of the subject. For example, Aura Giurcăneanu spent time at KPMG's Global IFRS technical support desk in London, where she advised on issues arising from around the world. This is the level of expertise that makes us one of the leaders in the IFRS field. Just ask Aura about your query and she will find the right person to answer."

Note:

The KPMG publication reflects IFRS as at 1 June 2009, applicable from 1 January 2009 (the requirements which are "in force"). IFRS rules which entered into force after 1 January 2009 (the "later" requirements) were not used in the preparation of these illustrative financial statements, with the exception of IFRS 3, Business Combinations (2008) as revised, and IAS 27 Consolidated and Separate Financial Statements (2008).

The KPMG material illustrates the financial statement component of the financial report, including balance, profit and loss account, cash flow and explanatory notes. The publication contains extensive explanations and special notes on IFRS requirements for the presentation of information. The user is also constantly directed to the relevant standard and to the requirements for presentation of information, by references in each element of the model.

About KPMG:

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 146 countries and have 140,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

KPMG in Romania operates from six offices located in Bucharest, Cluj-Napoca, Constanta, Iasi, Timisoara and Chişinău. We currently employ more than 600 partners and staff, both Romanian and expatriates.

© 2010 KPMG Romania S.R.L., a Romanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Printed in Romania.