Spanish law requires companies to present their annual accounts. This mandatory process is crucial is the evolution of your business and must be controlled at best by the business owner, especially if he does not know Spanish regulations well.
Accounting management involves many legal requirements that need to be handled. The regulations in force in Spain say that all companies are obliged to publish all financial statements in order to get a true image of their assets and the situation of the company. The information contained in these accounts is fore anyone who manages the company or invests money in it.
The annual accounts allow for easier reading of the accounts for any investors who want to learn about the company’s performance and determine whether it will be profitable or not. It is also for suppliers and employees, who want to be reassured about the company’s financial strength. Finally, they are also presented to the tax administration that will check the tax amount.
The accounts are a set consisting of an income statement, a balance sheet and an accounting annex. The balance sheet is a “snapshot” of the company’s assets that allow an assessment of its economic health, specifically to determine what it is worth after reprocessing and if it is solvent. The income statement, meanwhile, is an accounting document that summarises all the income and expenses of an establishment and its commercial activity for the accounting year. The income statement is an analytical document, part of the financial statements, whose function is to indicate the performance of the business as a whole. These documents must comply with pre-established models available of the website of the Ministry of Justice. In addition to this, the D2 software of the Commercial Register enables a direct completion of all the necessary forms to submit them later via the computer or on a CD.
The month following the approval of the annual accounts, mercantile companies must file a copy of all their annual accounts and its result, a management report and the auditors’ report to the Trade Registry according to their registered address. However, in some cases it is possible to opt for a simplified presentation of annual accounts or, alternatively, for a more developed presentation as according to the company’s needs. In addition to this, in some cases, a management review may be necessary. This should be developed by the directors or auditors of the company.