Ph.D. Lecturer Bengescu Marcela University of Pitesti, Romania
Abstract
The technical service is a part of the concrete activities included in the quality ensurance system. In this paper we will tackle financial issues related to the identification of processes and resources that the quality management has to schedule.
Analyzed from the angle of the organizing structures which compose it, the quality ensurance system must interact with all activities and it also has to be applied to all these.
It implies identifying and fulfilling the requirements related to each commercial interface and the activities, which must be included in the quality system, can be classified according to general and specific criteria. Technical service is one component part of the quality system.
Establishing financing sources of the expenses related to the service activity in the guarantee period granted to the clients implies recognizing the commissions for risks and expenses.
The criteria for recognizing a commission are settled by IAS:
“A commission will be reflected in accountancy only when:
a) an enterprise has a current (legal or implicit) obligation generated by a previous event;
b) it is possible that the use of resources which could affect the economical benefits be necessary in order to fulfill the respective obligation;
c) a relevant estimation of the obligation’s value can be carried out…”19 . As a result, engineering financing sources for the guarantees granted to the clients imposes increasing the expenses and implicitly reducing the profit. In the Romanian companies the information regarding the commissioned level of these resources result from the correspondence relation between the account’s debit 6812 “Exploitation expenses regarding the commissions for risks and expenses” and the account’s credit 1512
“Commissions for guarantees granted to the clients”.
19 Extract from IAS “Provisions, Contingent Liabilities and Contingent Assets” 37 paragraph 2.
The obligations mentioned in return with the expenditure account have a special nature, due to the uncertainty regarding the time and the value of the amounts involved in their payment.
Assessing the amounts pointed out in the expense account’s debit has as a basis the principle of the best assessment of the resources involved in liquidating the debts. For this purpose, we take into account the previous data concerning similar phenomena, but also the previsions for the following periods.
When a larger period of time is required in order to liquidate the debts, the registered value must be updated, using an updating rate that would reflect the current assessments on the market and the risks specific to the obligation.
If the company is expecting to recover the expenses related to acknowledging a commission, for example, through ensurance contracts or guarantees granted by the suppliers, the expense related to the commission can be submitted after the amount corresponding to the reimbursement is deducted.
In both bookkeeping variants, the criteria of acknowledging the analyzed expenses are identical20, but unlike Romanian bookkeeping regulations, the standard establishes more strict criteria concerning estimating the expenses with risk and expenses commissions.
Example:
Estimating the financing cost of the debts concerning the guarantees granted to the clients.
A company that produces carburetors guarantees that any carburetor will be replaced without payment if it breaks down as long as the vehicle is in your property. The company only collects an insignificant tax for replacing the carburetor. This guarantee is an important characteristic of the method of commercializing the company’s products. Previously, 8% of the sold products were given back so as to be replaced, according to the guarantee.
The average cost of a carburetor is of 1.950 million ROL. Suppose that 250 carburetors were sold in June the current year.
Remark:
There is a current obligation engendered by a previous coercive event which consists of selling the product with a guarantee, act which creates a legal obligation. A going out of the resources necessary in order to honor the obligation, for the guarantee on the whole.
20 O.M.F.P. for the approval of the simpified accountable regulations, harmonized with the European norms no.306, published in the Romanian M.O., 1st part, no. 279 from 25.04.2002, at paragraph 4.120.
Conclusion:
An expense to the level of the best estimation of the resources necessary for remedy the sold products is identified:
Number of sold units 250 The replacements rate according to
the guarantee
8%
Units estimated to be replaced 20 Estimated unit cost 1,950 The estimated debt concerning the
guarantee of the products
39.000
In all these operations, the company does not have to resort to
“creating some excessive commissions or deliberately overestimating the obligations”21, as such an attitude would mean affecting the image of the patrimony image and of the financial results. The fiscal limits concerning granting the guarantees of good execution settled by the laws of our country stipulate:
“The commissions for guarantees of good execution granted to the clients are only constituted for the delivered goods, performed work or services carried out during the respective trimester for which a guarantee is granted in the following periods to the level of the shares stipulated in the performed works or carried out services’ tariffs22”.
Similar conditions are foreseen for the cases of establishing commissions for guarantees of good execution of construction works:
For the construction works which need guarantees of good execution, according to the provisions in the concluded contracts, such commissions are established once a term, within the limits of the shares foreseen in the contracts, provided that there is a complete reflection in the incomes of the value of the works performed and confirmed by the beneficiary according to the works reports.
Indeed, the constructors diminish the value of the works invoiced with the amount corresponding to the guarantees of good execution and through the specific nature of this activity the clients are stable and the
21 “International Bookkeeping Standards 2002”, The Economical Publishing House, 2002, IAS 37, “Provisions, Contingent Liabilities and Assets”, paragraph 6, letter a)
22 Method norms for applying Law no. 571/2003 concerning the Fiscal Code, published in the Romanian
M.O., 1st part, no. 112 from the 6th February, paragraph 52.
person who carries out the work can regain the guarantee, if his works are of good quality.
SELECTIVE REFERENCES:
3. Dennis Lock- “GOWER Manual of Management”, CODECS Publishing House, Bucharest, 2001.
4. N. Feleagă “Compared Bookkeeping Systems”, The Economical Publishing House, Bucharest, 2000.
5. xxx “The International Standards of Bookkeeping 2000”, The Economical Publishing House, Bucharest, 2002.
6. xxx “The Fiscal Code Completed and Amended by G.O. no.
83/2004 for the Amending and Completing Law no. 571/2003, as approved by Law no. 494/2004.”