Legal Alert – New Accountancy Act 2016 (EN)
(in force as of 1st January 2016)
A new Accountancy Act, which enters into force as of 1st January 2016, was promulgated in State Gazette 95/8.12.2015. Some of the most important provisions are summarized below.
STORAGE OF ACCOUNTING INFORMATION
Mode of storage
The accounting information is to be stored on paper and/or on technical carriers.
Terms for storage
Payroll information (vedomosti za zaplati) – 50 years
Accounting registers; financial statements (including documents concerning tax audits and subsequent financial inspections) – 10 years
All other carriers of financial information – 3 years
The term for storage of the accounting information starts running from January 1st of the reporting period, following the reporting period to which the information refers to.
Who stores the information?
The accounting information is stored by the undertaking.
The accounting information may be submitted for storage to private or public archives under the procedure of the National Archive Fund Act.
CATEGORIES OF UNDERTAKINGS
An undertaking is defined into the respective category if as at December 31st the undertaking does not exceed the limits (or, respectively, exceeds the limits when large undertakings are concerned) of at least two of the three following criteria:
Public-interest entities are:
- entities that are publicly traded in an EU state;
- credit institutions;
- insurance and re-insurance companies;
- pension companies and their funds;
- investment intermediaries, which are deemed large undertakings; collective investment schemes and their management companies;
- financial institutions that are deemed large undertakings;
- Bulgarian Railways Holding;
- companies having as their main activity the production, transportation and trade with electricity and/or heat when deemed large undertakings;
- companies having as their main activity the production, transportation and trade with natural gas when deemed large undertakings;
- companies having as their main activity water supply and sewage;
CATEGORIES OF GROUPS OF UNDERTAKINGS
Groups of undertaking included in a consolidation are categorised as listed below if on a consolidated basis as at December 31st do not exceed the limits (or, respectively, exceed the limits when large groups are concerned) of at least two of the three following criteria:
ANNUAL FINANCIAL STATEMENTS
The annual financial statements shall for all undertakings comprise as a minimum:
- the balance sheet,
- the profit and loss account, and
- the notes to the financial statements.
The format, structure and contents of the full set of financial statements are determined in the applicable accounting standards.
Sole Traders with turnover below BGN 200.000
Sole traders having turnover of less than BGN 200.000 (and not subject to statutory audit) may draw up a profit and loss account only.
Micro-undertakings may draw up abridged balance sheets and abridged profit and loss accounts only per sections.
The above simplification is not applicable in respect of micro-undertakings that are investment companies or financial holdings.
Small undertakings may draw up an abridged balance sheet and an abridged profit and loss account only per sections and groups and notes to the financial statements.
Medium-sized undertakings; Large undertakings; Public-interest entities
Medium-sized undertakings, large undertakings and public-interest entities draw up a full set of financial statements according to the applicable accounting standards.
Additional disclosures for large undertakings and public-interest entities
In the notes to the financial statements large undertakings and public-interest entities shall disclose information for total fees for the financial year charged by each statutory auditor for:
- the audit of annual financial statements;
- tax advisory services;
- other non-audit services.
In the notes to the consolidated financial statements analogical disclosures are made in respect of undertakings, included in the consolidation.
A mandatory inventory count is to be conducted at least once a year. Undertakings with net turnover not exceeding BGN 200.000 may not conduct the mandatory inventory count.
Undertakings draw up annual financial statements in accordance with the National Accounting Standards (“NAS”). This requirement shall be applicable to large undertakings as of 1st January 2017.
An undertaking may choose to draw up its annual financial statements in accordance with the International Accounting Standards (“IAS”) provided the undertaking has not already chosen to apply NAS.
An undertaking that has drawn up and presented its financial statement under IAS cannot apply NAS.
Companies in liquidation; Insolvent Companies
Companies in liquidation and insolvent companies apply NAS
Non-profit organizations apply NAS (regardless of how categorized, i.e. micro, small, mediumsized or large).
Public-interest entities apply IAS.