The problems of creating the balance sheet in the processes of restructuring
The problems of creating the balance sheet in the processes of restructuring

Summary/Abstract: The basic form of enterprises in Latvia are companies with limited liability. Since 2000 there were individual businessmen (merchants). All this is defined in the Commercial law and within 4 years, by January, 1st, 2005 all operating businessmen should be re-registered in the Register. The commercial law has given many norms which earlier were not regulated by laws. But there are also norms of the law which have no practical use. For example, norm about registration for each enterprise of the auditor. Since 1993 of a rule of work of the auditor defines the Law "About annual reports of the enterprises". Transition of accounting in Latvia from the cash principle to the accrual basis took place on 1 July 1992. Last norm of the law on the basis of a cash principle concerned the tax to the added cost and it is cancelled since May, 1st, 2004. Today the cash basis of accounting is used only for individual enterprises and economic activities of individuals.. Generally since 1993 years annual reports of enterprises have been prepared according to the International Accounting Standards. It provides, the Law operating in 1993 on annual reports of the enterprises and the national plan of accounts constructed according to norms of the International standards of the account operated in 1994-1999. The commercial law in particular has given precise definition of the kinds of reorganization of the enterprises. The law provides for three variants of reorganization of the enterprise (1) association, (2) division and (3) transformation. As for reorganization of enterprises is concerned the law only states that reorganization of the enterprise demands carrying out of inventory and drawing up of the final financial report. The law on surtax from the enterprises since 2005 enters norms that after reorganization behind the new enterprise the right to reduce the tax to the sums of loss the last years considered by its reorganization is kept. Others norms of laws concerning reorganization of the enterprises in Latvia are not present. At the same time Accounting Board at the Ministry of Finance of Latvia has not the right to prescribe any techniques of the practical account. Therefore in reorganization of the enterprises and drawing up the unifying balance it is necessary to be guided by common sense more often.

• Details
• Contents