From the practice of KONTADOR Accounting Firm
Over the past few months, the same question has repeatedly arisen in our conversations with clients and colleagues:
once payments are made in euros, bank accounts are converted to euros, and accounting software operates in euros, in which currency should annual financial statements be prepared and filed?
The confusion is entirely understandable. That is why in the following lines we address the issue strictly from the perspective of applicable legislation and its practical implementation.
The Euro and Annual Financial Statements: what is actually filed and in which currency
The introduction of the euro leads to changes in payments and current accounting records, but it does not automatically change the currency of annual financial statements for already closed reporting periods.
The law clearly distinguishes between:
- current accounting records; and
- the annual financial statement as a report for a completed reporting period.
The key rule determining the currency of the annual financial statement
The decisive provision is contained in the Law on the Introduction of the Euro in the Republic of Bulgaria.
Article 48, paragraph 8
“Annual financial statements shall be prepared in the currency that is the official currency of the Republic of Bulgaria at the end of the reporting period, and the comparative data for the previous reporting period shall be presented in the same currency.”
This rule is unequivocal.
What matters is not when the report is prepared, but when the reporting period ends.
Why the 2025 annual financial statements are filed in thousands of Bulgarian leva
The end of the reporting period is decisive
The reporting period for the 2025 annual financial statements ends on 31 December 2025.
As of that date, the official currency of the Republic of Bulgaria is the Bulgarian lev.
This follows directly from:
Article 4
“As from the date of the introduction of the euro … the currency of the Republic of Bulgaria shall be the euro.”
Until that date, the official currency remains the lev.
Filing in 2026 does not change the currency
A common misconception is that because the 2025 annual financial statements are filed in 2026, they should be prepared in euros.
The law does not allow such an interpretation.
Article 48, paragraph 8 (again)
“… at the end of the reporting period.”
Not at the end of the year of filing.
Not at the date of preparation.
But as of 31 December 2025.
→ The annual financial statements for 2025 must be prepared and filed in Bulgarian leva, in thousands of leva.
What changes as of the date of the euro’s introduction
The law clearly regulates what happens after the introduction of the euro.
Article 48, paragraph 7
“As from the date of the introduction of the euro in the Republic of Bulgaria, current accounting documentation and accounting records shall be carried out in euros…”
This means that:
- current transactions are recorded in euros;
- accounting systems operate in euros;
- account balances are converted.
However, this provision does not override paragraph 8 and does not change the currency of annual financial statements for past periods.
The bank account is in euros, but the 2025 financial statements are in leva – how does this work in practice?
This is one of the most frequently asked practical questions.
Example:
- in March 2026, the company’s bank account shows a balance of EUR 600;
- the accountant is preparing the annual financial statements for 2025.
The question is: can this euro balance be directly used in the financial statements?
The answer is no.
Why the euro balance cannot be used
The euro balance results from the automatic conversion on 1 January 2026.
Article 28, paragraph 1
“On the date of the introduction of the euro … credit institutions shall convert all lev-denominated balances on their clients’ accounts into euros…”
This conversion:
- has no retroactive effect;
- does not change the accounting values as of 31 December 2025.
What is explicitly excluded from automatic conversion
Article 47, paragraph 3
“The requirement for automatic conversion shall not apply to values in leva contained in financial and other reports or statements…”
Therefore:
- reporting data for 2025 remain in leva;
- they are not replaced by euro values;
- they are not reconverted from euros to leva for the purposes of annual financial statements.
What the accountant actually does when preparing the 2025 financial statements
- Determines the balance as of 31 December 2025 in leva,
based on bank statements or accounting records. - Records this lev amount in the 2025 annual financial statements.
- The fact that the account is already in euros at the time of preparation is irrelevant.
Yes, in practice this means manual entry of the lev amount in the financial statements – and this is fully compliant with the law.
Comparative data in the first financial statements prepared in euros
The first annual financial statements prepared in euros will be those for 2026.
Article 48, paragraphs 7 and 8 (combined)
- the 2026 financial statements are prepared in euros;
- the data for 2025 are presented converted into euros solely for comparability purposes.
The original 2025 annual financial statements:
- remain in leva;
- are not amended;
- are not resubmitted.
A common mistake that will occur frequently
The law does not allow:
- choosing the currency at discretion;
- filing the 2025 annual financial statements in euros;
- “aligning” them with current euro-based accounting.
Such actions directly contradict Article 48, paragraph 8.
Conclusion
The introduction of the euro changes the future of accounting, but it does not change the reporting rules for completed periods.
Annual financial statements are always prepared in the official currency at the end of the reporting period.
Therefore:
- the 2025 annual financial statements are filed in thousands of Bulgarian leva, even if prepared in 2026;
- euro bank balances do not replace reporting values in leva;
- the first annual financial statements in euros will be those for 2026.
KONTADOR Accounting Firm
Expert solutions in times of change.