Understanding National Accounts and Financial Statements

Posted on Mar 1, 2025 in Business Administration and Innovation Management

National Accounts and Their Importance

The national accounts need to maintain a record of assets and possessions. Currently, they have become an information system that provides neutral, reasonable, and useful information for decision-making in the business field.

Key Concepts in Accounting

  • Heritage (Assets): The set of goods, rights, and economic resources controlled by the company, as well as debt obligations controlled by it. Its purpose is to obtain the maximum possible benefit.
  • Fiscal Year: The interval of time referred to in accounting information, typically 12 consecutive months.
  • Intended Audience for Accounting Information: Third parties, shareholders, employees, and public authorities.

Main Provisions of the Annual Accounts

  1. Commercial Code
  2. Corporations Law
  3. Limited Liability Company Law
  4. General Accounting Plan
  5. Guidelines of the European Community
  6. Other provisions

Heritage Elements

Heritage elements are the different entities that form the assets of the business (assets, rights, and other resources), each item valued in monetary units (e.g., Euros).

Examples:

  1. Assets: Money, furniture, merchandise.
  2. Rights: Bills, treasury returns.
  3. Other resources: … (Further examples needed)
  4. Obligations (use rights): Bills payable, other payables.

Equity and Asset Classification

An asset mass is a grouping of goods, other resources, controlled rights, or a meeting of obligations. A basic division of company assets includes:

  1. Assets: Those assets that group assets and rights, meaning ownership by the company, as well as other resources controlled by it.
  2. Liabilities: Group together those elements that represent debts or outstanding liabilities for the company, also called the source of foreign finance.

Accounts

An account is the representation and measurement of each of the patrimonial elements. It captures the initial location of the assets and the changes that occur subsequently.

Classification of Accounts

  1. CA: Asset accounts.
  2. CP: Liability accounts.
  3. CPN: Equity accounts.
  4. C. Cost: Expense accounts.
  5. C. Income: Income accounts.

Convention of Charges and Payments of Accounts

Following the classification above:

  1. Increases should decrease in the credit (haber) side.
  2. The opposite of the above.
  3. Same as 2.
  4. Born and must die by the credit side.
  5. The opposite of 4.

The General Accounting Plan (PGC) defines costs as decreases in the net worth of the company, representing the consumption of factors necessary to conduct the business of the company. It defines income as the increase in the equity of the company.

Components of Annual Accounts

  1. Balance Sheet.
  2. Income Statement (Profit and Loss).
  3. Statement of Changes in Equity.
  4. Statement of Cash Flows.
  5. Notes to the Financial Statements (Memoria).

Purpose of Disclosure

  1. Value of property at the end of the period under analysis.
  2. Result achieved in the experimental period.
  3. Analysis of variations in Equity.
  4. Movements in the treasury of the company.

Balance Sheet

The balance sheet represents the financial and economic situation of the entity at any given time, showing separately Assets (A), Liabilities (P), and Equity (PN). Assets are classified as:

  1. Current Assets (AC): Heritage elements expected to be sold or consumed during the normal operating cycle, no more than 12 months.
  2. Non-Current Assets (ANC): Patrimony elements that form the productive apparatus and are intended to provide lasting business activity.