Study on provisions created at listed companies on the regulated market in Romania

Neag Ramona () and Adorjan Timea-Noemi
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Neag Ramona: Faculty of Economics, Law and Administration, Finance and Accounting Department, Petru Maior University from Tirgu Mures

STUDIA UNIVERSITATIS PETRU MAIOR SERIES OECONOMICA, 2016, vol. 1, 120-158

Abstract: To analyze the caution shown by listed companies on the capital market in Romania more exactly on Bucharest Stock Exchange (BVB), we analyzed the types of provisions recognised by the companies in two successive financial years 2014-2015, and we followed the transparency shown by companies regarding the presentation of the amounts presented in the financial statements. To make an analysis on the conservative policy of companies regarding the dividend distribution we calculated the impact of not evidenced provisions on dividends, and we found out that the dividend distribution rate remains constant. Based on our study we can speak about a conservative policy of dividends for the analyzed companies. The prudent way in which the risks associated to activity are analyzed and quantified through the provisions shows a conservative approach which has direct effect on company decapitalization. It can be observed what kind of impact the provisions may have on earnings per share and gross dividend.

Keywords: reglementation; provisions; financial statements under IFRS; prudence; notes to the financial statements. (search for similar items in EconPapers)
JEL-codes: M (search for similar items in EconPapers)
Date: 2016
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