Analele Universităţii Constantin Brâncuşi din Târgu Jiu : Seria Economie (Feb 2017)
TAX AND ACCOUNTING TREATMENT ON THE REVALUATION OF TANGIBLE ASSETS IN ROMANIA
Abstract
According to the regulations in force, the revaluation is an alternative treatment to the cost method, tangible assets to be presented in accounting to the fair/ reassessed value. In this paper we aim to capture the accounting treatment established under the laws in force in 2017. We will present ways of determining the reassessment differences and their implications on determining the tax on buildings (only tangible assets as buildings). We will also present the way to register the added value (revaluation surplus) or minus value (amortization on reassessment) and the treatment of the revaluation reserve (surplus from reassessment recorded in account the 105 “Reserve from reassessment”) in accounting. Comparing the laws in force and those of IAS 16, we conclude that the accounting treatment related to the revaluation of tangible assets is similar. There remain unusable for the entities that do not apply IFRS in Romania: permanent reassessment of the duration of use and amortization method. Throughout the paper we will present the tax treatment of reassessment through corporate tax implications. Therefore, we will consider that the entities to which we refer are in the category of corporate tax payers and not in that of microenterprises. They no longer feel the influence of corporate tax because are taxed on income and not at the fiscal result (1% for those with at least 1 employee and 3% others). The main findings focus on the issue of identifying the exact moment when the reassessment reserve is taxed and on what are included in items similar to income, corporate tax implications.
