Accounting Regulations and Practices in Spain: A Comprehensive Look
Why Are Accountants Kept? Which Different Interests Are Protected by Accounting Activity?
Point Out the Different Sources of Regulation
The basic legislation setting out the legal framework in the sphere of accounting law is embodied in Spanish corporate legislation and has been amended in recent years in response to the mandatory harmonization of that legislation with EU Directives. Also, a hierarchy of sources was established to distinguish between:
- Fundamental legislation: the Commercial Code and the Revised Spanish Corporations Law, which must contain basic, stable, and lasting principles.
- Implementing regulations: the Spanish National Chart of Accounts, its industry adaptations (as described below).
- The resolutions of the ICAC: which would contain more detailed rules, the contents of which could be modified with greater ease.
Who Are Bound to Keep Accounts? How Should They Be Kept?
The accounting shall be kept directly by the businesspersons or other persons duly authorized, notwithstanding the former’s liability. Authorization shall be assumed to have been granted, except evidence to the contrary. Must be ordered, which subsequently required imposing the chronological track of all the transactions and regular production and inventory balances. Only accounts of this nature will serve the purpose for which this obligation is intended.
Point Out the Mandatory and Voluntary Records
Mandatory
According to Spanish legislation, all entrepreneurs are required to keep orderly accounts, in keeping with their business, including:
- A “Book of Inventories and Balance Sheets”
- A “Journal”
Companies must also keep:
- One or more “Minutes Books” (libro de actas) in which all the resolutions adopted by the annual and special shareholders’ meetings and other associated bodies of the company must be recorded.
- “Register Book of Nominative Shares” (libro de acciones nominativas) in public limited companies and share partnerships.
- “Register Book of Shareholders” (libro de accionistas) of Private Limited Companies.
Discretionary
- Other books shall be done on a voluntary basis depending on the specific circumstances of each case.
What Are the Bookkeeping Requirements? Point Out the “Formal” Requirements
All the accounting books and documents must be kept, whatever the procedure used:
- With clarity, by order of dates, without blank spaces, interpolations, crossings out, or erasures.
- As soon as errors or omissions are noticed in the accounting annotations, they shall be corrected.
- No abbreviations or symbols whose meaning is not clear according to the Law, the Regulations, or generally applicable business practice may be used.
Who Is Entitled to Legalize Accounting Documents? Which Records Had to Be Legalized on a Mandatory Basis? How Does the Business Registry Control This Activity?
Who Has to Conserve the Documentation? How Long Does It Have to Be Kept?
Traders shall keep the books, correspondence, documentation, and receipts related to their business, duly ordered, for six years, as of the last entry made in the books, notwithstanding what is established in the general or special provisions.
- Should the trader cease their activities, this shall not exonerate them of the duty referred to in the preceding paragraph, and if deceased, this shall befall their heirs.
- In the event of dissolution of companies, the liquidators shall be bound to fulfill the terms of that paragraph.