Guide to business in Spain Guía de negocios en España


6. Consolidation

6. Consolidation

As mentioned above, within the process of adapting Spanish accounting legislation to EU law, Royal Decree 1159/2010, of September 17, approved the Standards for the Preparation of Consolidated Financial Statements.

The most important aspects ruled by that Royal Decree in this sphere are as follows:

  • It widens the definition of "control" meaning the power to steer the financial and operating policies of an entity with the aim to obtain profits from its activities.
  • Companies are exempted from the obligation to consolidate where the parent only has investments in subsidiaries that do not have a significant interest, individually or as a whole, to present fairly the equity, financial position and results of the group companies.
  • It sets out the rules for recognizing eliminations of investments and net equity in cases of (i) inclusion of companies that constitute a business, (ii) consolidation of a company that does not constitute a business, and (iii) consolidation among companies that were already part of the group.
  • It lays down new rules for the conversion of financial statements in foreign currency.
  • It contains more detailed rules on income tax expense.
  • It amends the new Spanish National Chart of Accounts and the Spanish National Chart of Accounts for Small and Medium-Sized Enterprises, in relation to the recognition of business combinations, financial instruments and income taxes.

This Royal Decree applies to separate and consolidated financial statements for financial years beginning on or after January 1, 2010.

Guide to business in Spain

Annex III. Accounting and audit issues


ICEX - Gobierno de España - Ministerio de Economía y competitividad
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