Journal of Accounting and Management Information Systems (JAMIS)

Cost accounts and financial accounts. An alternative for Romanian businesses

Supp/2006 ,   p372..389

Daniela Artemisa CALU
Mădălina BRĂESCU
Lavinia OLIMID

Keywords:   interlocking cost accounts, by-nature profit and loss account, by-function profit and loss account

Although it has been characterized in the accounting literature as formally monistic, the Anglo-Saxon accounting systems feature two models of cost accounts. The integrated system makes no separation between financial and cost accounts and thus the reconciliation between cost profit and financial profit is limited to any non-cost items. The interlocking system separates financial and cost accounts and reconciles them periodically. Before the collapse of the command economy, Romanian enterprises operated within a formally monistic accounting system which used integrated cost accounts. The post-1990 accounting reform implemented a French-based accounting system which operates two subsystems, one focusing on the preparation of the financial statements, and the other on the provision of information for managerial purposes.
The existing costing subsystem does not account for certain aspects, such as the semi-finished products, work in progress and residual products, but also does not allow the calculation of margins and of the cost profit. Based on the cost accounts models existing in the Anglo-Saxon literature, we propose cost accounts which are better adapted to the information needs of Romanian businesses, providing more complete cost information and reconciling cost and financial data.