Accounting Regulations and Bookkeeping for Entrepreneurs

Accounting Obligations and Responsible Parties

Every employer shall keep proper accounts, appropriate to the activity of the company, to allow for the chronological tracing of all operations and the preparation of periodic reports and inventories. The records shall be maintained directly by employers or other authorized persons, without prejudice to their responsibility.

Compulsory Accounting Books

• Book of inventories and annual accounts
• Journal
• Minute book or record books (for corporations)

Legalization of Books

Legalization will take place in the Commercial Register at the address of the enterprise. It can be done a priori (before use) or afterwards in the event that the accounting entries are made on sheets which will then be bound to be correlatively binding books, which must be authenticated before the expiry of four months from the date of the financial close.

Inventory and Annual Accounts

• It opens with a detailed initial appraisal of the company.
• At least quarterly, sums and balances of checking balances shall be transcribed.
• Closing inventory.
• Annual accounts.

The Journal (Official Record)

The journal provides a daily record of all transactions relating to the business of the company. However, the joint endorsement of the total transactions for periods not exceeding one month is valid, provided that the details appear in other books or records.

Rules for Keeping Books

• Maintain clarity, in chronological order, without spaces, insertions, deletions, or overwriting.
• Mistakes or omissions must be corrected immediately upon discovery.
• The accounting entries shall be made by expressing the values in Euros.

Conservation of Records

The books, correspondence, documentation, and evidence must be retained for six years from the last entry made. The cessation of the employer in carrying out their activities does not excuse them from this duty.

Confidentiality of Accounts

The accounts of entrepreneurs are secret; however, in certain circumstances (including universal succession, liquidation of business entities, etc.), a court may decree the general communication and recognition of the books and other documents.

Core Accounting Principles

• Going concern
• Accruals
• Consistency
• Prudence
• No compensation
• Relative importance

Accounting Standards and Standardization

Standardization, through the preparation and issuance of standards, aims to achieve homogeneous behavior in the production of financial information in order to facilitate comparability across time and space. The application of these rules is intended to:

• Provide guidance to accounting professionals in preparing financial information.
• Provide users with a reference to the criteria with which the information they receive has been compiled.
• Guide auditors in their task of reviewing financial statements, providing an important reference point for the reliability of the information produced by companies.