The treatment of the provisions for taxation under the Accounting regulations conform to the European directives

Author:PhD Georgeta PETRE, PhD Alexandra LAZĂR

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Keywords:assessment, provisions, accounting loss, reported result, taxation

Abstract:
Under the Accounting regulations conform to the fourth Council Directive, part of the Accounting regulations conform to the European directives, approved through the Order of minister of public finance no. 1752/2005, a provision is a liability of uncertain timing or amount, been recognized only if:\r\n- an entity has a present obligation that arises from a past event;\r\n- it is probable that an outflow of resources will be required to settle that obligation; and\r\n- a reliable estimate can be made of the amount of the obligation.\r\n\r\nOne of the elements witch for the provisions are recognized is the taxation. Theses are recognized for the amounts payable in the future to the state budget, when that amounts do not represent a liability in the relationship with the state. At the moment of the recognition of the provisions for taxation, it should be known that, in the relationship with the state, other provisions can be recognized, like the provisions for fine. For instance, a provision for such a fine can be recognized as sanction for the negative effects on the environment, sanctioned by law. \r\n\r\nAt the evaluation of the provisions for taxation, similarly to the other provisions, it should know that the financial statements present the financial position of the entity at the end of the reporting period, not the financial position in the future. The provisions can not be recognized for the costs that will occur during the future activity of the entity. \r\n\r\nIn accordance with the Accounting regulations conform to the fourth Directive, one of the accounting principles is the prudence. This principle requires, among other aspects, to take into account all the predictable liabilities and potential loss occurred during the current financial year or a previous financial year, even if they became evident between the balance sheet and the date of the drawing out of the financial statements. \r\n\r\nConsequently, the provisions, including the provisions for taxation, should be recognized any time they meet the recognition criteria.\r\n

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