Accounting policy

                                                          

The Accounting Policy for the year 2008

I.    General Conditions:
    The C.B. “ Moldindconbank” J.S.C activates according to its own statue and laws in force of the Republic of Moldova, including the Law regarding the Joint Stock Companies, number 1134-XIII from 02.04.1997 and the Law of Financial Institutions number 550-XIII from 21.07.1995.
    It is registered at the state Registration Chamber of the Department of Informational Technologies of the Republic of Moldova, which is situated on the address 38, Armeneasca street, Chisinau, tax code nr. 1002600028096, the code for the Value Added Tax (VAT)-0200577.
    The Accounting Policy for the year 2008 is feasible to all the brunches of the bank and forms an integral part of the accounting evidence.
    The accounting evidence and the concluding of the financial reports is organized on the base of legislative and normative regulations of accounting system of normative regulations of accounting in the Republic of Moldova, including:

    The accounting of the property, debts and economical operations is kept in natural aspect and monetary expression with the help of full continuous, documentary and interdependent of them.
    The subject of the accounting policy is made up of the total principles, conventions, rules, methods and proceeding accepted for the organizing and keeping of accounting evidence and concluding of the financial reports, according to the provisions of the N.S.A.
    The basic destination and the purpose of the accounting policy consists in creating of an adequate mechanism for the accounting evidence of the whole spectrum of financial-economical operations, which allow the assurance of all the users of the financial reports with truthful and complex information regarding the patrimonial and financial situation of the Bank, the financial feat on the banking market of Moldova.
                 
II.    The organization and keeping of the accounting evidence.

    The bank keeps the accounts and works out the financial reports according to the N.S.A and concludes the financial situation in accordance with the International Standards of Financial Reporting.
    The accounting evidence is kept in the state language and the national currency. The accounting operations carried out in foreign currency are kept both in national currency and in foreign currency.
    The balance sheet is concluded for each operative day, including the weekends and holidays.
    The analytical and synthetical evidence is kept in accordance with the norms set by the N.B.M. within the Accounting Plan of the accounting evidence at banks and other financial institutions from RM and the Regulation regarding the organization of accounts in commercial banks.
    For supporting with documentary evidence the financial-economical operations, the standard forms of justified documents are used, being approved by the N.B.M. and the Statistics Department and forms worked out individually and included in the classified list of standard payment position and accounting documents, approved by the management of the Bank.
    The complex yearly evaluation of the patrimony in accordance with the requirements of the Ministry of Finance is carried out according to the situation on the first of November.
    The evaluation of the monetary means and of the amounts takes place in the obligatory keeping places at the closure of the financial practice and in the case of substitution of the responsible person and of the asserts administrator.
    The bank accounts of the clients are open and administrated in accordance with the N.B.M’s regulations regarding the opening, changing and closing of accounts at the authorized banks from RM, approved by HCA nr 297 from 25.11.2004 and the internal regulations of the Bank.
     The chief accountant of the bank in mutual agreement with the president and vice-president of the bank and the chief accountants and directors of the bank’s brunches, sign documents which serve as foundation for receiving and handing over of amounts. Goods, material and monetary means discharging the discount loan and financial debts.
    The executive committee of the Bank and the management of the branches are responsible for organizing and keeping of the accounts, the internal control of carrying out and registration of financial and economical operations in the accounting evidence.
    The chief-accountant organizes the system of internal control the documentation and registration in bookkeeping accounts of all the financial and economical carried out operations, presents the operative information and draws out the financial reports at the established terms and is responsible for the carrying out of the methodological principles of organization and keeping of the accounts.
    The responsibility for the correct writing of the justificative documents and authenticity of the data is born  by the authorized persons, by the management of the bank, who has the set them up, endorsed, signed, approved and reflected them in the accounting evidence.

III.     The variants and methods accepted by organizing accountancy

    Currency means the operations with the currency means in cash, handled, inclusively those through the payment counter,and are reflected in nominal effective foreign currency and simultaneously are estimated at the official table of prices established by the NBM for the running operational day.

    The evidence of personal properties.
    In the Investment Activity, the Bank earmarks the financial means in investment personal property including the state bonds and treasury bonds issued by the Ministry of Finance and certificated by the NBM.
    The investment personal properties are registered in accounting at the nominal value.
    The personal properties of the type bonds of other economic agents are registered at the purchasing price.
    Redemption of the discounts afferent to the operations with personal properties is estimated daily using the liniar method till the payment date and the paying off of the former is estimated monthly with the help of   the same method.
    Reevaluation of the balance and their reflection at the real value of the investments in personal properties is made at the closing of the financial exercise.

3.3. Formation of reduction for loan losses, other asserts that are not conditional bonds.
     The asserts including the liquid asserts in the accounts “Nostro” in foreign banks, the given loans, the investment personal properties, the disposals in other banks, the debts afferent to documentary discounts etc. are subdued to classification depending on the spectrum of parameters established in the following categories:

A.    Standard
B.    Supervised
C.    Substandard
D.    Doubtful
E.    Compromise

In dependence of the assigned category and the corresponding installments - 0%, 2%, 5%, 30%, 60%, and 100%  are created from the account of reserve expenditures to the account of reductions for losses to loans and asserts and in commission accounts for conventional bonds.
    The use of reductions for remittance of afferent problematic asserts occurs depending on the decision of the bank.
    The evidence of the covered asserts from account’s reductions for losses to asserts is kept in the memorandum account with the execution further on of the full legal right for returning of the assert.

3.4. The evidence of material and non-material asserts.
 The non-material asserts are reflected in the financial accounting at the entrance value, that comprises:

Referring to non-material asserts, for which we can’t certainly establish the period of use, the amortization is calculated with the help of the liniar method at the settled term by the bank.
    To the category unchanging means, we include the things, whose initial value or reestimated unitary, overruns the maxim of 3000 lei and are planned to be used within a year: buildings, special constructions, transmission equipment, machines and outfit, means of transport, household inventory, furniture etc.
    The Bank assigns the weapons and the armaments from the endowment of the Department for guard and encashment to the structure of unchanging means:
    The Bank reflects separately in the accounting evidence the plots of land afferent to buildings and special constructions or which are meant to be granted on lease.
    At the entrance, the unchanging means are reflected in accounting at the entrance value, which is equal for:  

    The wearing value of a unit of unchanging means is determined resulting from the entrance value of the thing without establishing the probable remaining value.
    The wear of unchanging means is calculated with the help of liniar method, taking as basis their useful functioning length.
    The useful functioning length of unchanging means and of existing non-material asserts and the new acquired ones, is determined for each inventory object by the decision of the Bank’s management, taking into consideration the financial situation of the Bank, the working experience with such asserts, the real state of the objects in the current period, the necessity of making reparations and the maintaining of asserts; the development tendencies in the technological domain etc.
    At the same time for determining the expenditures for the administration period linked to calculating the wear of unchanging means and amortization of non-material asserts for tax purposes, the Bank is guided by the provisions of the Catalogue unchanging means and non-material asserts. The Bank’s Policy in this direction is the approaching of useful functioning length to the terms foreseen in the tax purposes.

3.5. The evidence of the goods in stock, materials and objects of little value and short length.
      The asserts purchased by the Bank, whose unitary value is less than 3000 lei, regardless of the exploitation length or the service length less than one year, no matter what  the value of one unit, is reflected in evidence as objects of little value and short length.
      The purchasing expenditures of goods in stock and materials contain the value of purchases, the customs duties and other taxes, settled by the legislation in force ( with the exception of the taxes, which later will be returned to the enterprise by the tax bodies).The transportation  expenditures are reflected in the corresponding balance posts.
     The bank uses consumption norms of fuel and oil, course and exploitation norms of the tires approved by the Leading Committee.
     The objects of little value and short length are reflected in the balance sheet at the sum of purchasing value of the objects that are in the storehouse.
     For the objects of little value and short length, whose unitary value exceeds 50℅ from the settled ceiling, in the case of delivering them from the storehouse to exploitation, the wear is calculated in proportions of 100% from its value and the object is registered to the staff’s administration.    
     The objects that have an individual value less than 1500 lei, are ticked to expenditures, in proportion of their releasing from the stockhouse to exploitation and at the same time are registered in the extrabalance register.
The bank reflects in the accounting evidence, the goods in stock and materials according to the purchasing prices referring them to the bank’s expenditures, while they are consumed.

3.6. The debts evidence.
The Bank reflects in the accountancy as debts, the debts of other enterprises and physical persons to the Bank, which come out as a result of its activity, afferent to commercial invoices for different purchases, services and works, beforehand and in advance payment etc.
The bank reflects in the balance sheet the debts at their nominal value, including the afferent taxes.
For the debts afferent to capital investments and the debts afferent to diverse discounts with physical and legal persons, including those with the seeing term repayment, the Bank forms reductions for the losses corresponding to the internal procedure.
 
3.7. The evidence of the advance payment.
The advance expenditures are reflected in the balance sheet in the distinct posts and are passed to consumption or expenditures by measure of accurance of afferent period. They include:

3.8. Personal Capital
    The personal capital of the bank includes the social capital and the supply, comprising also the reserve capital and the undistributed profit of the administration period and of the previous one. The social capital is established in the Bank’s Statute and its modification takes place exclusively as a result of  the general meeting of shareholder’s decision.

3.9. Determination of the income and expenditure  
     For determining the income and expenditures, the Bank results from the specialization of the financial exercise, which presumes the delimitation in time of the income and expenditures, so they are stated and reflected in the accounting evidence and in the financial balance sheets, as the financial – economical operations are carried out and are passed to the result of the exercise to which they refer, not taking into consideration the effective moment of encashment of debts or the debt’s payment.
The commissions afferent to the given bank loans are reflected in the category advance income with month amortization during the period of administration.
Monitorization commissions of the loans are included in the income using the multiplication method.
The income from commissions or other payments received in foreign currency is reflected in accountancy in national currency at the official table of prices of currency established by the NBM at the receiving date.
For the asserts and the bonds generating income and expenditures, the Bank daily calculates  and reflects in the accounting evidence, the debts that ought to be paid.
The net profit is distributed and used on the base of the decisions taken by the General meeting of the shareholders for:

3.10. Reevaluation of  the balances afferent to currency accounting evidence and financial balance sheet all the made operations in foreign currency and their nominal value and at the official table of prices of currency in proportion to the Moldavian leu, established by the NBM at the date of the transaction.
The balances of the means afferent to the currency accounts are reflected in financial balance sheets in national currency. For this purpose, the Bank reevaluates these balances at the official currency table of prices, settled by the
National Bank of Moldova.
 

3.11.The evidence of general risks of the Bank
     The Bank will use the reserve funds created in the conditions stipulated at the p.3.8.as additional reserve for insurance of the Bank, including those for additional insurance of the losses to the loans issued in the settled order by the Bank.
     For decreasing the risks linked to significant concentrations of the asserts and bonds of the Bank.

3.12. The evidence of the fiscal bonds.
    The calculation and payment of duties, taxes and payments to the national public budget are made within the framework of the Central Bank, including the branches of the Bank, and concluding them in the accounting balance sheet.