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Bulgaria

International Financial Reporting Standards

Summary
As a result of the European Commission Regulation (EC) No 1606/2002, starting January 1, 2005 all European Union (EU) listed companies are required to prepare consolidated accounts following the International Financial Reporting Standards (IFRSs) endorsed by the EC. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs.

    General Overview

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. (Regulation No 1606/2002)
    Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)
    Some accounting and financial reporting requirements are established in the CC 1991 with subsequent amendments. All companies incorporated under the Commercial Code of 1991 (CC 1991) are required to comply with its requirements relating to the maintenance of proper accounting records and the preparation and submission of audited accounts for statutory purposes. (CC 1991)
    Like most other transition countries, Bulgaria has approached the implementation of the IFRSs gradually and at stages. Over the last years, Bulgarian National Accounting Standards (NASs) have been revised several times, each time getting closer to IFRSs. However, because of the later partial and sometimes incorrect adaptation important discrepancies between the local accountancy framework and the IFRSs still remained. The European Union (EU) accession process and the strong political will for increasing foreign investments justified more radical steps in accelerating the accounting reform. EU membership has been a driving force in adopting such reforms as the AA 2002 and the Independent Financial Audit Law 2002 (IFAL 2002). (Petralov & Tchompalov 2004, p. 15; WB 2002)
    The AA 2002 provides for full IFRSs application from the beginning of January 1, 2003 for all listed companies on official and nonofficial securities markets, as well as for other companies, mainly financial institutions, which are established and operate on the basis of special legislation, not solely on the CC 1991. Amendments to the AA 2002 were promulgated in the State Gazette, issue No. 96 of October 29, 2004, and came into force on January 1, 2005. The amendments were aimed at achieving a maximum harmonization of the accountancy legislation with the requirements of the European Union. According to the amendments, as from January 1, 2005, the following enterprises are required to prepare financial statements in accordance with the IFRSs adopted by the EU: (1) enterprises performing their activities by virtue of special laws (banks, insurance companies, investment and pension security enterprises, etc.), for which the requirement for performance of independent financial audit is regulated in a normative act, as well as the enterprises emitents under the Law on Public Offering of Securities (LPOS 1999); (2) enterprises which do not meet the requirements for SMEs under the Law on the Small and Medium Size Enterprises (LSMSE 1999); (3) enterprises which have prepared the 2004 financial statements on the basis of the IFRSs. The Council of Ministers shall organize the official translation of the IFRS adopted by the European Union Committee into the Bulgarian language. (Petralov & Tchompalov 2004, p. 15; AFA 2005, p. 1; EY 2006, p. 44)
    NASs were promulgated in the State Gazette, issue No. 30 as of April 7, 2005. The NASs apply to SMEs and are effective as of January 1, 2005. SMEs may choose whether to apply IFRS or NASs. The Ministry of Finance (MoF) develops NASs. They are subject to approval by the government. The standards are promulgated with a Governmental Decree. The AA 2002 refers to these standards and to the way of their promulgation. An entity is considered a SME if the following criteria are met: (a) average number of employees up to 250; and (b) net sales up to BGN 15 million (EUR 7.7 million) or fixed assets up to BGN 8 million (EUR 4.1 million). When a certain set of accounting standards is applied for one reporting period, no subsequent change in the basis of preparation of financial statements is allowed. According to to the World Bank, as of 2002, there was no effective enforcement of compliance with NASs. (WB 2002, p. I; AFA 2005, pp. 1-2; ICPAB 2006, pp. 56, 57; EY 2006, p. 44)
    The regulator for banks is the Banks Oversight Department (BOD) of the Bulgarian National Bank (BNB). The accounting requirements are determined by the AA 2002. The BOD reviews and controls compliance of the financial statements with IFRSs and requires and reviews other statements which the banks must submit according to the Law on Banks (LB 1997) and BNB decrees. The BOD prescribes some reporting requirements out of the scope of those for annual financial reporting prescribed by the AA 2002. Nevertheless, it controls the enforcement of the accounting requirements. (ICPAB 2005)
    Prior to 2003, the State Securities Commission (SSC) reviewed annual and interim financial reports of listed companies and checked their compliance with the legal accounting and disclosure requirements. These responsibilities were established by the Parliament in the LPOS 1999. As of 2002, the SSC had limited resources to review issuers' financial statements and relied almost entirely on auditors to check compliance with accounting standards. In 2003, the Financial Supervision Commission (FSC) was established under the Financial Supervision Commission Act, 2003 (FSCA 2003). It is an institution that is independent from the executive authority and reports its activity to the National Assembly of the Republic of Bulgaria. The FSC is a specialized government body for regulation and control over the financial system which unifies the regulatory functions that used to be carried out by the former SSC, the Insurance Supervision Agency (ISA) and the Social Insurance Supervision Agency (SISA). The Insurance Oversight Commission (IOC) within the FSC, which is the regulator for insurance companies, prescribes some reporting requirements out of the scope of those for annual financial reporting prescribed by the AA 2002. Nevertheless, it controls the enforcement of the accounting requirements. (WB 2002, p. 8; ICPAB 2005; FSC website)
    The Institute of Certified Public Accountants of Bulgaria (ICPAB) is a member of the International Federation of Accountants (IFAC). The Institute is an independent professional organization established by the IFAL 2002. The General Assembly of the Institute has adopted the entire IFAC Ethics Code for its own Ethics Code. (IFAC website; ICPAB 2005)


    The Principles

    IFRS 1: First-time Adoption of International Financial Reporting Standards (effective 2006)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IFRS 1: First-time Adoption of International Financial Reporting Standards was issued in June 2003 and applies to an entity whose first IFRS financial statements are for a period beginning on or after January 1, 2004. In June 2005, the IASB issued amendments to IFRS 1: First-time Adoption of International Financial Reporting Standards and the Basis for Conclusions on IFRS 6: Exploration for and Evaluation of Mineral Resources. The amendments clarify the IASB's intentions with respect to an exemption provided to first-time adopters of IFRSs who choose to adopt IFRS 6 before 1 January 2006. The effective date of these amendments is January 1, 2006. (IASB website)

    IFRS 2: Share-based Payment (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IFRS 2 Share-based Payment was issued in February 2004 and applies to annual periods beginning on or after January 1, 2005. (IASB website)

    IFRS 3: Business Combinations (effective 2004)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IFRS 3: Business Combinations was issued in March 2004 and is applicable for business combinations for which the agreement date is on or after March 31, 2004. (Deloitte IAS Plus website)

    IFRS 4: Insurance Contracts (effective 2006)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IFRS 4: Insurance Contracts was issued in March 2004 and is applicable for annual periods beginning on or after January 1, 2005. On August 18, 2005, the IASB amended the scope of IAS 39 to include financial guarantee contracts issued. However, if an issuer of financial guarantee contracts has previously asserted explicitly that it regards such contracts as insurance contracts and has used accounting applicable to insurance contracts, the issuer may elect to apply either IAS 39 or IFRS 4: Insurance Contracts to such financial guarantee contracts. The amendments to IAS 39 and IFRS 4 are effective for annual periods beginning on or after 1 January 2006, with earlier application encouraged. (Deloitte IAS Plus website)

    IFRS 5: Non-current Assets Held for Sale and Discontinued Operations (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IFRS 5: Non-current Assets Held for Sale and Discontinued Operations was issued in March 2004 and is applicable for annual periods beginning on or after January 1, 2005. (IASB website)

    IFRS 6: Exploration for and Evaluation of Mineral Resources (effective 2006)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IFRS 6: Exploration for and Evaluation of Mineral Assets was issued in December 2004 and is applicable for annual periods beginning on or after January 1, 2006. (IASB website)

    IFRS 7: Financial Instruments: Disclosures (effective 2007)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    According to the 2006 Ernst & Young doing Business in Bulgaria report, the financial year in Bulgaria is the calendar year. Enterprises prepare annual financial statements by March 1of the following year. Annual public consolidated financial statements are prepared by June 30 of the following year by companies holding more than half of the shares or votes, or controlling more than half of the membership of the managing bodies of other companies. Annual financial statements are prepared in a prescribed format for small and midsize enterprises (SME). They consist of a balance sheet, an income statement, a cash flow statement, a statement of changes in equity, and notes. Enterprises whose financial statements are subject to audit by independent registered auditors should also prepare management reports. The notes to the financial statements should present information about the basis of preparation of the financial statements and accounting policies adopted with regard to significant transactions and events. They should also contain disclosures, required by Bulgarian Accounting Basis but not included elsewhere in the main financial statements, or which are relevant and necessary for the fair presentation of the accounts. If prepared, management reports should present information on the development of a company's business, forecasts thereon, significant events having occurred after the annual closure of accounts and other relevant information. Special disclosure requirements apply for banks, insurance companies, investment companies and certain other entities. (EY 2006, p. 45)

    IFRS 7: Financial Instruments: Disclosures was issued on August 18, 2005 and is applicable for annual periods beginning on or after January 1, 2007. (Deloitte IAS Plus website)

    IAS 1: Presentation of Financial Statements (effective 2007)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    In general, companies are required to submit annual financial statements to the National Statistics Institute (NSI) and the tax authorities by March 31 of the following year. Public companies, banks (branches of foreign banks inclusive), insurance companies and pension funds should follow specific legally defined reporting and filing requirements. For instance, banks are required to submit a number of special statements and reports to the Bulgarian National Bank (BNB). They are also obliged to publish their balance sheets and income statements in an approved format for half year reporting in at least one main daily newspaper. The annual financial statements subject to independent audit by registered auditors, together with the auditor's report thereon, shall be published in the media (i.e. daily newspaper, relevant magazines or internet) within 90 days following the date of approval. If the financial statements are published on the internet only, free access to the corresponding internet site should be available for at least 3 years after the date of publishing. (EY 2006, p. 45)

    The effective date of IAS 1 (rev. 2003): Presentation of Financial Statements was January 1, 2005. However, the IASB further revised IAS 1: Presentation of Financial Statements in August 2005 as a part of its project to develop IFRS 7 Financial Instruments: Disclosures. The IASB concluded to amend IAS 1 to add requirements for disclosures of: (1) the entity's objectives, policies and processes for managing capital; (2) quantitative data about what the entity regards as capital; (3) whether the entity has complied with any capital requirements; and (4) if it has not complied, the consequences of such non-compliance. These disclosure requirements apply to all entities, effective for annual periods beginning on or after 1 January 2007, with earlier application encouraged. (Deloitte IAS Plus website)

    IAS 2: Inventories (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB revised IAS 2: Inventories in December 2003. The revised standard is effective for periods commencing January 1, 2005. (IASB website)

    IAS 7: Cash Flow Statements (effective 1994)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 7: Cash Flow Statements (revised 1992) is applicable for periods beginning on or after January 1, 1994. (IASB website)

    IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB revised IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 10: Events after the Reporting Period (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB revised IAS 10: Events After the Balance Sheet Date in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 11: Construction Contracts (effective 1995)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 11: Construction Contracts is applicable for periods beginning on or after January 1, 1995. (IASB website)

    IAS 12: Income Taxes (effective 2001)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 12: Income Taxes is applicable for periods beginning on or after January 1, 1998. (IASB website)

    IAS 14: Segment Reporting (effective 1998)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 14 Segment Reporting is applicable for periods beginning on or after 1 July 1998. (IASB website)

    IAS 16: Property, Plant and Equipment (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The International Accounting Standards Board (IASB) revised IAS 16 Property, Plant and Equipment Sheet Date in December 2003. The revised standard is effective for the periods commencing on January 1, 2005. (Deloitte IAS Plus website)

    IAS 17: Leases (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The International Accounting Standards Board (IASB) revised IAS 17: Leases in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 18: Revenue (effective 1995)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 18: Revenue is applicable for periods beginning on or after January 1, 1995. (IASB website)

    IAS 19: Employee Benefits (effective 2006)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 19: Employee Benefits was issued in 1998 and is applicable for periods beginning on or after January 1, 1999. However, the IASB revised IAS 19: Employee Benefits in December 2004 to take into account options to recognize actuarial gains and losses in full, outside profit or loss, in a statement of changes in equity. The amendment is applicable for periods beginning on or after January 1, 2006. (Deloitte IAS Plus website)

    IAS 20: Accounting for Government Grants and Disclosure of Government Assistance (effective 1984)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 20: Accounting for Government Grants and Disclosure of Government Assistance is applicable for periods beginning on or after January 1, 1984. (IASB website)

    IAS 21: The Effects of Changes in Foreign Exchange Rates (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The International Accounting Standards Board (IASB) revised IAS 21: The Effects of Changes in Foreign Exchange Rates in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 23: Borrowing Costs (effective 1995)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 23: Borrowing Costs is applicable for periods beginning on or after January 1, 1995. (IASB website)

    IAS 24: Related Party Disclosures (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB revised IAS 24: Related Party Disclosures in December 2003. It is applicable for annual periods beginning on or after January 1, 2005. (Deloitte IAS Plus website)

    IAS 26: Accounting and Reporting by Retirement Benefit Plans (effective 1998)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 26 Accounting and Reporting by Retirement Benefit Plans is applicable for periods beginning on or after January 1, 1988. (IASB website)

    IAS 27: Consolidated and Separate Financial Statements (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    According to the 2006 Ernst & Young doing Business in Bulgaria report, annual public consolidated financial statements are prepared by June 30 of the following year by companies holding more than half of the shares or votes, or controlling more than half of the membership of the managing bodies of other companies. (EY 2006, p. 45)

    The International Accounting Standards Board (IASB) revised IAS 27: Consolidated and Separate Financial Statements in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 28: Investments in Associates (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The International Accounting Standards Board (IASB) revised IAS 28: Investment in Associates in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 29: Financial Reporting in Hyperinflationary Economies (effective 1990)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 29: Financial Reporting in Hyperinflationary Economies is applicable for periods beginning on or after January 1, 1990. (IASB website)

    IAS 31: Interests in Joint Ventures (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB revised IAS 31: Interests in Joint Ventures in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 32: Financial Instruments: Disclosure and Presentation (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    According to the 2006 Ernst & Young doing Business in Bulgaria report, the financial year in Bulgaria is the calendar year. Enterprises prepare annual financial statements by March 1of the following year. Annual public consolidated financial statements are prepared by June 30 of the following year by companies holding more than half of the shares or votes, or controlling more than half of the membership of the managing bodies of other companies. Annual financial statements are prepared in a prescribed format for small and midsize enterprises (SME). They consist of a balance sheet, an income statement, a cash flow statement, a statement of changes in equity, and notes. Enterprises whose financial statements are subject to audit by independent registered auditors should also prepare management reports. The notes to the financial statements should present information about the basis of preparation of the financial statements and accounting policies adopted with regard to significant transactions and events. They should also contain disclosures, required by Bulgarian Accounting Basis but not included elsewhere in the main financial statements, or which are relevant and necessary for the fair presentation of the accounts. If prepared, management reports should present information on the development of a company's business, forecasts thereon, significant events having occurred after the annual closure of accounts and other relevant information. Special disclosure requirements apply for banks, insurance companies, investment companies and certain other entities. (EY 2006, p. 45)

    In general, companies are required to submit annual financial statements to the National Statistics Institute (NSI) and the tax authorities by March 31 of the following year. Public companies, banks (branches of foreign banks inclusive), insurance companies and pension funds should follow specific legally defined reporting and filing requirements. For instance, banks are required to submit a number of special statements and reports to the Bulgarian National Bank (BNB). They are also obliged to publish their balance sheets and income statements in an approved format for half year reporting in at least one main daily newspaper. The annual financial statements subject to independent audit by registered auditors, together with the auditor's report thereon, shall be published in the media (i.e. daily newspaper, relevant magazines or internet) within 90 days following the date of approval. If the financial statements are published on the internet only, free access to the corresponding internet site should be available for at least 3 years after the date of publishing. (EY 2006, p. 45)

    IAS 32: Financial Instruments: Disclosure and Presentation was issued in December 2003 and is applicable for annual periods beginning on or after January 1, 2005. (Deloitte IAS Plus website)

    IAS 33: Earnings per Share (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The International Accounting Standards Board (IASB) revised IAS 33: Earnings per Share in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 34: Interim Financial Reporting (effective 1999)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 34: Interim Financial Reporting is applicable for periods beginning on or after January 1, 1999. (IASB website)

    IAS 36: Impairment of Assets (effective 2004)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB issued IAS 36: Impairment of Assets in March 2004. It is applied to goodwill and intangible assets acquired in business combinations after March 31, 2004 and to all other assets for annual periods beginning on or after March 31, 2004. (Deloitte IAS Plus website)

    IAS 37: Provisions, Contingent Liabilities and Contingent Assets (effective 1999)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 37: Provisions, Contingent Liabilities and Contingent Assets was issued in July 1998 and is applicable for periods beginning on or after July 1, 1999. (IASB website)

    IAS 38: Intangible Assets (effective 2004)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB revised IAS 38: Intangible Assets in March 2004. The revised standard is applied to the accounting for intangible assets acquired in business combinations after March 31, 2004, and to all other intangible assets for annual periods beginning on or after March 31, 2004. (Deloitte IAS Plus website)

    IAS 39: Financial Instruments: Recognition and Measurement (effective 2006)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    In December 2003, the IASB issued IAS 39: Financial Instruments: Recognition and Measurement comprehensively revised as a part of the IASB's Improvement Project. IAS 39 became effective in January 2005. Subsequently, during the period of 2004-2005 the IASB issued several amendments to IAS 39 on macro hedging, day 1 gain/loss transition, hedges of forecast intragroup transactions, fair value option, and financial guarantee contracts. The amendment for macro hedging is applicable for annual periods beginning on or after January 1, 2005; the amendment for day 1 gain/loss transition is applicable for annual periods beginning on or after January 1, 2005; the amendment for hedges of forecast intragroup transactions is applicable for periods beginning on or after January 1, 2006; the amendment for fair value option is applicable for periods beginning on or after January 1, 2006; and the amendment for financial guarantee contracts is applicable for periods beginning on or after January 1, 2006. (Deloitte IAS Plus website)

    IAS 40: Investment Property (effective 2005)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    The IASB revised IAS 40: Investment Property in December 2003. The revised standard is effective for periods commencing January 1, 2005. (Deloitte IAS Plus website)

    IAS 41: Agriculture (effective 2003)

    On July 19, 2002, the European Commission Regulation (EC) No 1606/2002 was passed by the European Parliament and the European Council of Ministers requiring the adoption of International Financial Reporting Standards (IFRSs), formerly International Accounting Standards (IASs), issued by the International Accounting Standards Board (IASB). As a result of the Regulation, all EU listed companies are required to prepare their consolidated financial statements following IFRSs endorsed by the EC from January 1, 2005. Member States may decide as well to extend this permission or this requirement to other companies as regards the preparation of their consolidated accounts and/or their annual accounts. Bulgaria became an EU Member State on January 1, 2007. Pursuant to the Accountancy Act of 2002 (AA 2002), since 2003, all listed companies in Bulgaria as well as banks, insurance companies, mutual funds, and other financial institutions, have been required to prepare their consolidated financial statements according to IFRSs. Starting in 2005, IFRSs are required in both consolidated and individual company financial statements of listed companies and financial institutions as well as all large Bulgarian limited liability entities. Small and medium size enterprises (SMEs) may choose whether to apply IFRSs or National Accounting Standards (NASs). NASs are based on the EU 4th and 7th Directive as well as on IFRSs. (Regulation No 1606/2002; Deloitte IAS Plus website; ICPAB 2006, pp. 56, 57)

    IAS 41: Agriculture is applicable for periods beginning on or after January 1, 2003. (IASB website)

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    Sources of Assessment

    Accounting Finance Assurance Tax Law, "Comments on the Amendments in the Accountancy Act Related to the Accounting Standards Applicable in the Republic of Bulgaria," April 2005. Available from Accounting Finance Assurance website. Accessed on January 19, 2007. (AFA 2005)

    Deloitte & Touche Tohmasu IAS Plus website. Accessed on April 16, 2007. (Deloitte IAS Plus website)

    Ernst & Young, "Doing Business in Bulgaria - 2006 Edition," 2006. Available from Ernst & Young website. Accessed on April 17, 2007. (EY 2006)

    Institute of Certified Public Accountants of Bulgaria, "Response to the IFAC Part 2, SMO Self-Assessment Questionnaire," Self-assessment prepared as a part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, October 2006. Available form International Federation of Accountants website. Accessed on April 16, 2007. (ICPAB 2006)

    Institute of Certified Public Accountants of Bulgaria, "Assessment of the Regulatory and Standard- Setting Framework," Self-assessment prepared as part of the International Federation of Accountants' (IFAC) Member Body Compliance Program, April 2005. Available from International Federation of Accountants website. Accessed April 16, 2007. (ICPAB 2005)

    Petralov, S. and Tchompalov, I., "Report on the Progress of Implementing in Bulgaria the White Paper on Corporate Governance in South East Europe," April 2004. Available from Organization for Economic Cooperation and Development website. Accessed on January 19, 2007. (Petralov & Tchompalov 2004)

    World Bank, "Bulgaria: Report on the Observance of Standards and Codes (ROSC) - Accounting and Auditing," December 16, 2002. Available from World Bank website. Accessed on January 19, 2007. (WB 2002)

    Relevant Organizations

    Institute of Certified Public Accountants of Bulgaria (ICPAB) (in Bulgarian only)

    Ministry of Finance of the Republic of Bulgaria (MoF)

    Council of Ministers of the Republic of Bulgaria

    National Statistics Institute (NSI)

    Financial Supervision Commission (FSC)

    Insurance Oversight Commission (IOC)

    Bulgarian National Bank (BNB)

    Banks Oversight Department of the Bulgarian National Bank (BOD)

    Bulgarian Stock Exchange (BSE)

    European Financial Reporting Advisory Group (EFRAG)

    European Accounting Regulatory Committee (ARC)

    Federation des Experts Comptables Europeens (FEE)

    Committee of European Securities Regulators (CESR)

    Hellenic Capital Market Commission (HCMC)



    Relevant Legislation/Regulation

    Accountancy Act, 2002 (AA 2002)

    Independent Financial Audit Law, 2002 (IFAL 2002) (in Bulgarian only) ttp://www.ides.bg/bg/p_n_ind.html

    Law on the Public Offering of Securities, No. 114, 1999 (as amended in 2005) (LPOS 1999)

    Commercial Code, No. 48, 1991 (as amended in 2000) (CC 1991)

    Law on the Bulgarian National Bank, 1997 (as amended in 2006) (LBNB 1997)

    Law on Banks, 1997 (as amended in 2005) (LB 1997)

    Law on Insurance, 1997 (including amendments through 2004) (LI 1997)

    Financial Supervision Commission Act, 2003 (FSCA 2003)

    Law on the Small and Medium Sized Enterprises, 1999 (LSMSE 1999)

    Rules and Regulations of the BSE-Sofia

    Regulation of the European Parliament and of the Council of On the Application of International Accounting Standards (EC) No 1606, 2002 (Regulation No 1606/2002)

    EU Accounting-Related Directives



    Supplementary Sources

    Financial Supervision Commission website. Accessed on January 24, 2007. (FSC website)

    International Federation of Accountants website. Accessed on April 16, 2007. (IFAC website)

    International Accounting Standards Board (IASB) website. Accessed on January 26, 2007. (IASB website)

    Organization for Economic Cooperation and Development, "White Paper on Corporate Governance in South East Europe," June 2003. Available from Organization for Economic Cooperation and Development website. Accessed on January 19, 2007. (OECD 2003)
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