ORDER OF THE MINISTRY OF FINANCE OF THE REPUBLIC OF MOLDOVA

of April 28, 2004 No. 27

About approval and enforcement of the Regulations on procedure for carrying out inventory count

According to Art. 9 and 41 of the Law on the financial accounting N 426-XIII of April 4, 1995 I ORDER:

1. Approve and enter into action Regulations on procedure for carrying out inventory count from the date of publication in Monitorul Oficial al Republicii Moldova.

2. Declare invalid the Regulations on procedure for carrying out inventory count approved by the order of the Ministry of Finance N 30 of 05.03.2001 (Monitorul Oficial al Republicii Moldova N 35-38 of 29.03.2001, part III, the Art. 101).

Approved by the Ministry of Finance of the Republic of Moldova of April 28, 2004 No. 27

Regulations on procedure for carrying out inventory count

Introduction

1. The regulations on procedure for carrying out inventory count (dalee-Polozheniye) are developed based on the Law on financial accounting, and also mandatory requirements about periodic carrying out inventory count of property of legal entities and physical persons, for the purpose of confirmation of truthfulness and reliability, accounting data and financial statements.

2. In this Provision the procedure for carrying out inventory count of property, the assets and liabilities which are subject to inventory count, procedure for determination and reflection of results of inventory count, and also the standard forms used in case of inventory count are in details provided.

Purpose

3. The purpose of this provision consists in establishment of real condition of property of the company.

4. The main objectives of inventory count are:

a) determination of the actual availability of fixed assets, parcels of land, non-material values, financial investments, inventory stocks, money, amount of work in progress, receivables and obligations, etc.;

b) control of condition of assets, by means of comparison of their actual availability to accounting data;

c) identification of values which partially lost the initial qualities, or obsolete models;

d) identification of not used values for the purpose of their subsequent realization;

e) check of observance of rules and storage conditions of inventory stocks, money, and also rules of content and operation of machines, equipment and other fixed assets;

f) check of reality of book value of non-current assets, inventory stocks, cash amounts in cash desks, on accounts of financial institutions, receivables and payables, work in progress, deferred expenses and other balance sheet items.

Coverage

5. This Provision extends to everything legal entities and physical persons irrespective of patterns of ownership and legal form (the state and municipal companies, economic partnerships and societies, cooperatives, non-profit organizations and other legal entities and physical persons which are engaged in business, lawyer or notarial activity and their branches) which according to the Law on financial accounting shall carry out inventory count of fixed assets, investments, the performed investments, incomplete capital construction and capital repairs, work in progress, inventory stocks, money, calculations, etc.

6. Legal entities and physical persons shall carry out complete inventory of property:

a) at the beginning of activities, which main objective - establishment and assessment of the elements of property constituting fee in the authorized capital;

b) at least once a year, as a rule, in the end of the year, throughout the entire period of functioning of the company. Annual inventory count of elements of property is performed, as a rule, upon completion of financial year. Economic agents with diversified structure of activities can carry out inventory count till December 31 on condition of the correct determination and reflection of results of inventory count in the balance sheet constituted for the corresponding year;

c) in the terms established by the director according to the Law on financial accounting;

d) in case of change (substitution) of the responsible person in day of reception-transmission of material values;

e) in case of establishment of the facts of thefts, plunders or abuses, and also spoil of values - it is direct at the time of their identification;

f) in case of fire or natural disasters (floods, earthquakes, etc.) - directly after fire extinguishing or the termination of natural disaster;

g) in case of revaluation of fixed assets, inventory stocks, etc.;

h) in case of reorganization or liquidation of the company;

i) in case of the change in price;

j) based on the decision of monitoring bodies in case of monitoring procedure or other bodies provided by the law;

k) every time when there are data on shortages or excesses which can be established only by carrying out inventory count.

7. Inventory counts are also subject the values which are not belonging to the company, but being under its authority (stored, accepted on the commission, leased, received for conversion, etc.), and also not registered for the different reasons.

8. Inventory count of valuable materials and diamonds, agricultural materials and products, construction materials, etc. is performed according to this Provision and domestic situation approved and approved according to the procedure, established by the legislation, proceeding from specifics of this industry of economy.

9. In case of collective financial responsibility, inventory count is carried out without fail when changing (replacement) of the manager of the site (the workshop, warehouse) and/or upon the demand of one or several responsible persons of the same site (the workshop, warehouse).

10. In case of receipt of the claim from the buyer about shortage of goods and materials, the complete or selective inventory of goods and materials on which claims arrived is performed.

Determinations

11. In this Provision the following concepts are used:

Inventory count is set of transactions by means of which availability of all asset types and liabilities in quantitative and cost or only in cost indicators, depending on situation is established, being in structure of property of the company or in its maintaining for date of their implementation.

Sudden check is the check performed unexpectedly i.e. undeclared in advance.

Book value is the amount on which the asset or liability is estimated for date of creation of the balance sheet.

Inventory value - the cost established in case of assessment of elements of property at the time of carrying out inventory count depending on their usefulness at the company and market price.

Quantitative and cost the method consists under the authority of quantitative accounting on categories of values in places of their storage, and in financial accounting - under the authority of quantitative and cost accounting.

Gross and cost the method consists under the authority of analytics only in value term both in financial accounting, and at the level of the responsible person.

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