CONCLUDING PROVISIONS

§ 1.

Under the meaning of Art. 1, an "enterprise" shall refer to any economically separate legal entities, sole proprietorships and companies without legal personality performing any activity permitted by the law.

§ 2.

"Accounting (reporting) period" under the meaning of this Law shall be one calendar year (January 1 - December 31).

§ 3.

The circulation of accounting documents, from the moment of their issue or entry, until the moment of their filing in the permanent accountancy archive, is done in a manner determined by the chief accountant.

§ 4.⁷⁵

Under the meaning of Art. 5, item 7, "caution" shall stand for:

1. Reporting the actual financial result;
2. Taking into account all probable risks and possible losses for future accounting periods;
3. Accounting of the devaluation of the assets;
4. No offsetting between receivables and commitments.

(1)

 ⁷⁶ "Historic cost", under the meaning of this Law, shall stand for the value at which assets, liabilities and capital are recorded at the time of their acquisition or emergence.

(2)

 ⁷⁷ "Going concern", under the meaning of Art. 5, item 1, shall mean that the enterprise does not foresee, or does not need to be liquidated, or to reduce significantly the scope of its activity over a period of at least one year.

(3)

 ⁷⁸ "Continuous posting", under the meaning of Art. 5, item 2, shall mean that the income from and expenses for transactions and events are posted in the books at the moment they arise, regardless of the time of actual receipt or payment of cash and are shown in the financial statements for that same period.

(4)

 ⁷⁹ "Priority of content over form", under the meaning of Art. 5, item 4, shall mean that transactions and events are to be shown in the annual financial report in accordance with their economic content, essence and financial reality, rather than formally as per their legal form.

(5)

 ⁸⁰ "True and fair picture", under the meaning of Art. 5, item 5, shall mean that transactions and events are to be represented in financial statements objectively and unpremeditatedly.

(6)

 ⁸¹ "Materialness", under the meaning of Art. 5, item 6, shall stand for the degree of usefulness of accounting information in the financial statements.

(7)

 ⁸² "Documentary motivation", under the meaning of Art. 5, item 11, shall mean documenting each business transaction in an accounting document. Documentary motivation of business transactions should ensure the consistent application of the principle of posting as clarified in § 4a, par. 3. In issuing (receiving) a document the date on which falls into an accounting period following the period of performing the economic activity, priority should be given to the principle of posting. For this purpose, it is possible to draw up a temporary or interim document reflecting the business transaction within the period when it actually arose. In documenting transactions internal to the enterprise, the available requisites as per Art. 8 of the Law on Accountancy shall be filled in.

(8)

 ⁸³ "Current price", under the meaning of Art. 18, par. 6, shall stand for the cost which would have been paid for the acquisition of a given asset at the present moment, as well as for the non-discounted cost which would have been paid to redeem a given liability at the present moment.

(9)

 ⁸⁴ "Investment property", under the meaning of Art. 19, par. 2, item 3a, shall stand for land and/or building which are not being used in the process of business activity of the investing enterprise.

(10)

 ⁸⁵ "Goodwill", under the meaning of Art. 19, par. 2, item 4, shall stand for the surplus of acquisition costs over the share of the acquirer in the fair value of distinguishable assets and liabilities.

(1)

 ⁸⁶ The income of an enterprise is generated from sale of goods and services, and through third parties' use of its resources (interest, penalty payments, license fees, rent, dividends and others).

(2)

 ⁸⁷

(1)

Expenditure shall be formed from reduction in assets, allocation of wages, social security contribution, benefits, etc. resulting from an activity performed by the enterprise, regardless of the time of their payment.

(2)

Production costs shall not include financial and extraordinary expenses, nor expenditures associated with the organisation and management of the enterprise.

§ 8.⁸⁹

The National Chart of Accounts, the accounting standards, the primary accounting documents and the methodological guidance for book keeping excluding those of the budget enterprises, shall be developed and updated by the Institute of Certified Accountants through an assignment made by the Ministry of Finance.

§ 9.⁹⁰

A National Council of Accountancy shall be established under the Ministry of Finance as a consulting body, with the participation of experts from higher education establishments, from the Institute of Certified Accountants, the Union of Accountants in Bulgaria, the public and private sectors of the national economy.

§ 10.

The annual report of the companies for 1991 and 1992, with the exception of those of banks and joint-stock companies, shall not be subject to a mandatory approval by certified accountants.

§ 11.

This Law comes into force on April 1, 1991, and repeals all normative acts which are in contradiction with it.

§ 12.

Enforcement of this Law is hereby assigned to the Council of Ministers.

§ 23.

Individuals who have obtained the qualifications entitling them to the right to practice as certified accountants under the provisions applicable until this time shall retain their rights.

§ 24.

Within one month of the date when this Law comes into force, the Minister of Finance shall appoint an interim President of the Executive Board of the Institute of Certified Accountants, who shall organise the election of the respective bodies within three months of his appointment.

§ 25.

Individuals employed on a labour contract, who perform audits and verifications of annual financial reports are to terminate their labour relations by 1 June 1997, pursuant to the requirements under Art. 54, par. 4, item 1.

§ 26.

Annex 1 to Art. 40, par. 1, item 1, and Annex 2 to Art. 40, par. 1, item 2 are hereby adopted.

This Law was adopted by the Grand National Assembly on 3 January 1991, and the State Seal was hereto affixed.

§ 38.

(1)

The revaluation reserve set up as a result of the revaluation of assets and liabilities as of 31 December 1997 shall be used until its depletion in the following sequence:

1. for increasing the legal capital up to the minimum required by law, except for banks;
2. for covering deferred financial expenses as of 31 December 1997 incurred from the revaluation of commitments in foreign exchange;
3. for covering loss from previous accounting periods not covered.

(2)

The balance remaining from the reserve established under par. 1 shall be used to increase own reserves.

(3)

The increase of legal capital under par. 1, item 1 shall be done through increasing the participation shares or the value of shares held by the partners, or shareholders, respectively.

(4)

Where, after par. 1, item 2 is applied, there remain deferred financial expenses not covered, the latter shall be carried over for five years ahead, or in proportion to the commitments in foreign exchange being retired as shown in the balance sheet as of 31 December 1997.

(5)

Government budget-funded enterprises shall show the results from long-term asset revaluation as lasting liabilities.

(6)

Enterprises employing single-entry accounting shall record the revaluation results in the registers for chronological and systematic bookkeeping.

(7)

The results from the revaluation of assets and liabilities and the use of the revaluation reserve shall be shown in the annual financial report as of 31 December 1997.

In government budget-funded units of the Ministry of Defence and the Ministry of Internal Affairs, the provisions of Art. 2, par. 2 shall apply as of 1 January 2000.

(1)

 ⁹² On entering into force of the law all of the numbers in old Levs, indicated in laws entered into force before 5 July 1999, are replaced with numbers reduced 1000 times in new Levs. The replacement of all numbers in old Levs with numbers reduced 1000 times in new Levs shall apply also to all laws, adopted after 5 July 1999, which have been entered or will enter into force after 5 July 1999.

(2)

Authorities, which have adopted or issued sub-normative acts entered into force before 5 July 1999, and in which there are numbers in Levs, shall make the ensued from this law amendments in a way, so that the amendments to be applicable from the date of entering into force of the law.

This law shall enter into force from 5 July 1999.

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