Accounting in Spain

Capital: Madrid

Population: 46.798.168

GDP: 1.425 billions USD

Spain is located in southwestern GDP per capita: 30.115 USD
Europe with parts of territory in
the Atlantic Ocean and across
the Mediterranean Sea.
Legal Background

Spain like many European countries adopted a

Napoleonic Code legal system from the early 19thC. This
represents a codified legal structure. Basically a book of
rules.
Accounting in Spain In line with the codified legal system, a structured plan
of accounting was created. This has been updated on several occasions the
last being in 2007 which updated the 1990 regulations. (Taking effect from
Jan 2008) This Spanish GAAP is known as Plan de Contabilidad or PGC.
This is again a book of rules that has to be followed. However, it was highly
influenced by IFRS.
 The Regulation of the
National Accounting System
in Spain
Annual Account:

● A company’s annual accounts comprise the

balance sheet, income statement, statement of
changes in equity, statement of cash flows and the
notes
● The annual accounts should be written clearly so
that the information disclosed is readily
understandable and useful to the user when
making decisions of an economic nature.
● The annual accounts should present fairly the
equity, financial position and results of the
company, in accordance with prevailing legislation
Financial Statements All companies must produce annually a:

1. Balance Sheet
Challenge 3
2. Statement of financial position.
3. Income Statement –
4. A statement of financial activity.
5. Cash Statement
6. A summary of the cash flows of the business.
7. Statement of Equity
8. Summary of changes in the shareholders funds.
9. Notes that give detail to enable the reader to fully understand the
financial statements.
 Instituto de Contabilidad y
The Official source of local accounting Auditoria de Cuentas (ICAC)
standards and other regulations
Institute of Accounting and Audit
The companies must then submit a report with the following compulsory sections:

● Profit and loss account or income statement

● Balance sheet
● Notes to the annual accounts
● Statement of changes in equity
● Cash flow statement
Companies shall apply the following principles in their accounting and in their
annual accounts:

1. Going Concern
2. Accrual
3. Consistency
4. Prudence
5. Offsetting
6. Materiality