The basic regulations governing accounting law in Spain are closely linked to the country’s commercial legislation and have been amended in recent years to conform to the accounting regulations of other EU countries and the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).

In Spain and the Basque Country there is a General Chart of Accounts (GCA) which applies to all companies, and also a specific Chart of Accounts for small and medium-sized enterprises (SMEs), which simplifies the accounting treatment of transactions carried out with respect to the GCA.

The GCA for SMEs may be applied by those companies which meet at least two of the following requirements on the closing date of two consecutive financial year:

1. The total of the asset items does not exceed 4,000,000 euros.
2. The net amount of the annual turnover does not exceed 8,000,000 euros.
3. The average number of workers employed during the year does not exceed 50.

Under no circumstances may companies in any of the following circumstances apply this GCA for SMEs:

1. When they are considered public interest entities.
2. When they are part of a group of companies that prepares or should prepare consolidated annual accounts.
3. When their functional currency is not the euro.
4. When they are financial institutions that raise funds from the public and assume obligations with respect to these funds and entities that assume the management of the foregoing.

Consolidated Annual Accounts (Royal Decree 1159/2010 of September 17)

Every parent company of a group of companies shall be obliged to prepare consolidated annual accounts for the group when, on the closing date of two consecutive financial years, all the companies in the group exceed two of the following limits:

The rules for preparing consolidated annual accounts shall be mandatory for groups of companies, including subgroups, with a Spanish parent company.

The application of all these accounting standards is mandatory for all companies, regardless of their legal form, whether individuals or corporate (natural person or legal entity).