Septiembre 2011

Events after the reporting period

Events after the reporting period

Events after the reporting period that provide evidence of conditions that existed at the end of the reporting period These events must be taken into account when preparing the financial statements and they give rise, depending on their nature, to an adjustment, disclosure in the notes to the financial statements, or both.

Events after the reporting period that are indicative of conditions that did not exist at the end of the reporting period

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  These events do not give rise to an adjustment in the financial statements.
  

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  If the events are of such importance that non-disclosure would distort the assessment capacity of the users of the financial statements, the entity must disclose in the notes to the financial statements the nature of the event after the reporting period and an estimate of its effect (or, as the case may be, a statement that such an estimate cannot be made).
  

When preparing the financial statements all the information that could affect the application of the going-concern principle of accounting must be taken into account.

General rules for the preparation of financial statements

Formal preparation of the financial statements

The entity’s owner or the directors that authorise the financial statements for issue are responsible for their accuracy.

The financial statements must be formally prepared by the directors within a maximum period of three months from the end of the reporting period.

The structure of the financial statements must conform to the standard model, unless the models for abridged financial statements may be applied.

Abridged financial statements

The companies that meet the requirements to prepare an abridged balance sheet, abridged statement of changes in equity and notes to the abridged financial statements are entitled to use the models for abridged financial statements.

The companies that prepare abridged financial statements are not obliged to prepare a statement of cash flows and there are fewer minimum disclosure requirements than for the standard financial statement models.

However, when these companies perform transactions the disclosure of which is governed by the standard model of financial statements and not the abridged model, the related information must be included in the notes to the abridged financial statements.

General rules

Some of the general rules to be taken into consideration are as follows:

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  In addition to the amounts for each item for the current period, the amounts corresponding to the immediately preceding period must be presented. If they are not comparable, the amounts for the preceding period must be adjusted.
  

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  Wherever appropriate, each item must be cross-referenced to the corresponding information in the notes to the financial statements.
  

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  There must be a segregation of the balance sheet and income and expense items relating to Group companies, associates and jointly controlled entities (the latter shall be included in the items relating to associates).
  

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  Items included on the consolidation of joint ventures that do not have their own legal personality must be disclosed in the notes to the financial statements.
  

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  The quantitative information expressed in the notes to the financial statement must at all times be comparative, unless the accounting standard states otherwise in a certain specific case.
  

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  Interim financial statements must be presented in the same form and using the same policies as those established for the financial statements.
  

Balance sheet

Some of the rules to be applied in the preparation of the balance sheet are as follows:

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  Items must be classified as current and non-current.
  

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  Financial assets and financial liabilities may be presented net if the entity has the legal right and intention to offset the related amounts.
  

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  Accumulated impairment losses and accumulated depreciation and amortisation reduce the balance of the related asset.
  

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  Research expenditure must be presented separately under “Intangible Assets”.
  

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  The land and buildings that meet the definition of investment property shall be included therein.
  

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  Inventories with a long-cycle of production must be presented separately from those with a short cycle.
  

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  Own equity instruments acquired must be presented as a deduction from equity.
  

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  Non-refundable grants, donations and legacies not yet taken to income form part of equity.
  

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  Non-current assets classified as held for sale and disposal groups classified as held for sale, as well as the liabilities that form part of the disposal group, are presented separately from other assets and liabilities. These assets and liabilities cannot be offset or presented as a single amount.
  

Income statement

The income statement must be prepared taking into account, inter alia, the following rules:

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  Items are classified on the basis of their nature.
  

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  An “Excessive Provisions” account is created for reversals of provisions, except those relating to obligations to employees and operating provisions, which are recognised by netting the excess off against the corresponding expense accounts.
  

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  The costs associated with restructuring are recognised on the basis of their nature.
  

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  If the entity presents exceptional income or expenses of a significant amount (floods, fires, fines or penalties), an account must be created entitled “Profit/Loss from Operations - Other Gains and Losses”.
  

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  A separate line item “Profit/Loss for the Year from Discontinued Operations Net of Tax” must be presented that includes a single amount comprising the post-tax profit or loss of discontinued operations and the post-tax gain or loss recognised in the measurement to fair value less costs to sell or on the sale
  

or disposal of the assets or disposal groups constituting the discontinued operation.