Guide to business in Spain Guía de negocios en España


4. Conceptual accounting framework and recognition and measurement bases

4. Conceptual Accounting Framework And Recognition And Measurement Bases

In relation to the practical application of the Spanish National Chart of Accounts, after a first part which sets out the conceptual accounting framework, part two establishes recognition and measurement bases for the various asset, liability and income statement items.

Following is a brief summary of the main features contained in the conceptual framework and in the most significant recognition and measurement bases introduced by the Spanish National Chart of Accounts currently in force.

Table 1



Spanish national chart of accounts (SNCA)

Components of financial statements

The financial statements comprise a balance sheet, an income statement, a statement of changes in equity a cash flow statement and notes.

Statement of changes in equity and cash flow statement

These are added as new documents to be included in the financial statements along with the balance sheet, income statement and notes. The cash flow statement is to be prepared using the indirect method. The statement of changes in equity has two parts: the statement of recognized income and expense and the statement of total changes in equity.

Requirements concerning information to be included in the financial statements

The information included in the financial statements must be relevant and reliable. A quality deriving from reliability is completeness. Also, the financial information must be comparable and clear.

Accounting principles

The obligatory accounting principles are: going concern, accrual, consistency, prudence, no offset and materiality.


Except when a standard expressly provides otherwise, the no offset principle shall be applied.

The SNCA defines the conditions for being able to present a financial asset and a financial liability and tax assets and tax liabilities for their net amount.

Items included in the financial statements

The following items are defined: assets, liabilities, equity, income and expenses, which shall be recognized when the probability criteria regarding the inflow or outflow of resources embodying economic benefits are met and their value can be determined reliably.

The SNCA defines the concepts of historical cost or cost, fair value, net realizable value, value in use and present value, costs to sell, amortized cost, transaction costs, carrying amount and residual value.

Guide to business in Spain

Annex III. Accounting and audit issues


ICEX - Gobierno de España - Ministerio de Economía y competitividad
Elaborado por Garrigues - Abogados y Asesores Tributarios
INVEST IN SPAIN. Paseo de la Castellana, 278. 28046 Madrid
T: (+34) 91 503 58 00 |