Financial accounting and business management system in process of converge unique european curency

Financial accounting and business management system in process of converge unique european curency

Abstract: : Most national changeover plans foresee a period during which the mandatory dual display of prices (both in national currency and in euros), it is a requirement of national legislation.
Dual display is an essential method in order to familiarize the staff with clients and the value of goods in euros

JEL classification: G32, M41

Key words: financial accounting , convert prices, relations with suppliers, national changeover

1. Introduction

The dual display can be used on labels on shelves with price tags on products, price lists or the total shown on receipts.
To avoid confusion and possible additional costs is extremely important that the dual display of prices could begin only after the official conversion rate was irrevocably fixed. The conversion rate is set by the EU Council once a State has fulfilled the convergence criteria.

2.Financial accounting and business management system

There may be national standards or recommendations on data conversion on previous transactions financial reporting purposes (such as items forming the debtor and creditor balances historical acquisition costs of individual items of inventory, etc..).

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Budget for the year in which the euro will be introduced enterprises would be to make all calculations directly in euros and have taken decision on the timing and the approach of converting data in euros historical budget

National laws shall determine both the starting date reporting or reporting period for which tax returns and documentation, and financial statements must be made in Euros (for example, income tax documents VAT payroll taxes social security contributions

Year-end financial reports that will prepare using all the national currency but the explanatory notes section will be conversions using the fixed conversion rate so that the information be known in both currencies the national and the European single currency and the information can become comparable financial data users need them At the end of the conversion will be published financial statements in the national currency this year after the financial statements will be published only using european single currency If subsequent to the preparation and approval of financial statements in national currency it is found that there are mistakes, they will be corrected using the single currency euro at the time of discovery. From the date of euro introduction the general rule requires that all balance sheet items to be converted using the conversion rate. So after all this time accounting items must be recorded and managed in a single currency There are special rules used in the processing undergone conversion by equity shares, securities, derivatives, payments in advance and positions expressed in a foreign currency other than euro Some rules for the conversion of these items were included in the amended Act Law and complete accounting

The latter will establish procedures for assets and conversion debt so as to prevent undue differences arise from conversion procedures Rounding capital and private equity could be imposed by national legislation or advisable for reasons of transparency applying the conversion rate and conversion rules in the case of capital society and to the capital denominated in national currency leads in euros could be necessary to increase or decrease) company to obtain capital amounts rounded Conversion of shares with nominal value of shares without nominal value if national law provides this possibility National legislation would impose a general meeting extraordinary shareholders for any decision on the increase or decrease) capital in this respect would be necessary to review the statute and other regulations society Companies established in the previous year the euro should express its capital directly into euro to avoid conversion but this must be provided by romanian legislation Shareholders should be informed as soon as possible of any change holdings due to the introduction of the euro for example, on the number shares their nominal value paid capital and profit sharing

2.1.Process of convert prices

We speak about the implementation of pricing strategies conversion This strategy was developed following a market analysis reflecting the impact of the changeover to the euro on the participants and relationships within the market analysis In setting prices in euro would be taken into account the following aspects: the cost structure, sensitivity to prices, consumers desire compare prices a high degree of transparency of convertion process Customers will have an important psychological impact that will causethem to be extremely sensitive to changes in products They will supervise very carefully how the conversion performed by the companies. To avoid misunderstandings between customers and companies is recommended to companies conduct to environmental training actions consumers Such action may be providing lists catalogs and brochures with prices in euros, to be and last conversion rule applied to examples. The aim should be to ensure that the impact of conversion on prices is neutral overall In principle the changeover would not should affect the price or value

Authorities in the European Union believes that three factors will help avoid rising prices 1 strict compliance with the conversion and rounding rules 2 competition between retailers and 3 consumer vigilance Euro zone governments, also ensured public that operation conversion prices and tariffs in the public sector will be neutral or in favor consumers merchants and several federations have made commitments in terms of price stability during this period of transition to new european currency. Therefore, it is anticipated influence on no prices in our country

2.2.Relations with suppliers

The companies must manage the impact on relationships providers in this regard would be sought from suppliers and price lists single currency bills. Introduction of the euro may also represent an opportunity for enterprises to get more favorable supply conditions. For example, the decisive factor in choosing a higher transparency of price and exchange rate risks associated elimination instead, generated by the euro offers the possibility of finding alternative new and less expensive. Contracts are also affected by changes caused by the changeover . The principle that they will work is that of continuity, as existing contracts will remain valid (already completed) that owning their content amounts expressed in national currency. The validity of these contracts will not be modified, but the monetary values will be contracted converted using the conversion ratios application formally.
In the process of  euro convertion all documentation legal status of a company must be checked for compliance requirements conversion. In terms of new contracts with recurring payments and provisions valid after the changeover date, values should be set directly in euros to avoid uneven prices determined by subsequent conversions. If contracts are signed with partners outside the euro area could be useful to introduce a euro clause stating that if continue the contract after the official date of introduction of the euro, it will monetary unit remains mandatory.

3. Conclusions

With the introduction of the euro customers in the retail sector may have a sense of insecurity and in some cases they may feel concerned about possible negative consequences of this change such as rising prices Measures designed to increase customer confidence based on concrete information and counter negative attitudes can facilitate acceptance of the euro For instance, customers can provide information about the rate of rate by examples (eg, customers can receive leaflets tables commodity prices This is a simple way to show that prices have been converted correctly and reduce uncertainty Also business customers must be informed properly They need to know when the company plans to start using the euro for example, orders, invoices, etc..). Society needs to verify if this plan could create problems for major clients.

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