Accounting Treatments Specific to Financial Assets

• Author: Trifan A.
• Position: Transilvania University of Bra?ov, Faculty of Economic Sciences and Business Administration
• Pages: 165-172

Bulletin of the Transilvania University of Braşo v

Series V: Economic Sciences • Vol. 11 (60) No. 2 – 2018

ACCOUNTING TREATMENTS SPECIFIC

TO FINANCIAL ASSETS

Adrian TRIFAN1

Abstract: The subject of this article is financial assets, which include

securities held in other companies’ equity and long-term receivables in the

form of long-term loans to other companies or in the form of deposits,

guarantees and bail-outs submitted by the entity to third parties. Starting

from defining, delimiting and presenting the recognition practices, namely

the cancellation of recognition and evaluation of these asset structures, we

have exemplified through case studies the accounting of the main financial

asset operations.

Key-words: securities, shares, deferred green certificates, long-term

receivables

1. Overview

Financial assets, also called long-term financial investments, are a special category of

fixed assets, representing a way of placing an entity’s cash surplus with another entity

whose financial resources are insufficient for its development and which allow the entity

that placed the availabilities to earn some financial incomes in the form of dividends and

interest or to have benefits by marketing the financial assets.

In the balance sheet, the Order of the Minister of Public Finance no. 1802 / 2014 for

the approval of the Accounting Regulations on the individual annual financial statements

and consolidated annual financial statements, subsequently amended and

supplemented, defines the following categories of financial assets: shares held in

affiliated entities, loans granted to affiliated entities, shares held in associates and

jointly controlled entities, loans granted to associates and jointly controlled entities,

other investments held as property and other loans (Article 264 (1)). At the same time,

paragraph (4) of the same article states that in the category of other investments held as

immovable assets, the green certificates postponed to payment are also distinctly

highlighted.

The significance of the above qualitative structures is presented below:

The shares held in affiliated entities are equity and other variable-income securities

held by an entity in the capital of other companies within a group or outside the group,

1 Transilvania University of Brașov, Fac ulty of Economic Sciences and Business Administration,

adrian.trifan@unitbv.ro