Journal of Accounting and Management Information Systems (JAMIS)

Decryption of Romanian reserves for treasury shares

7/2004 ,   p66..74


Keywords:   treasury shares, international accounting standards, equity, Romanian accounting system

In our article we have tried to understand the reason for which Romanian accounting standards use reserves for treasury shares ( shares owned by the company that issued them) and also explained the methods recommended by International Accounting Standards for those kinds of shares, using practical examples. This paper compares the accounting treatment for treasury shares for both small and medium sized enterprises and listed companies in Romania as opposed to IAS treatment and recommends an improvement, with arguments, in these methods because the Romanian accounting policy is less useful and less fair for financial statements’ users and is not in the IAS’ spirit. In our paper we have also illustrated the British law for those kinds of shares and how British companies recognize them in their financial statements.