The General Accounting Plan (PGC) is the legal text that contains the regulations governing company accounting in Spain.
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The Spanish state’s general accounting plan was born in 1973, but has been modified 2 times, once in 1990 and another in 2008 to adapt Spanish accounting regulations to European ones.
The current regulations would be Royal Decree 1514/2007 on accounting regulations for Spanish companies and Royal Decree 1515/2007 on the specific General Accounting Plan for SMEs.
Configuration of the General Accounting Plan (PGC)
1st. Conceptual framework
The Conceptual Framework comprises the set of fundamentals, principles (GAAP, generally accepted accounting principles) and basic concepts on which accounting is based.
2nd. Registration and valuation standards
The registration and valuation standards develop certain concepts included in the Conceptual framework. There are 23 and they are as follows:
1- Development of the conceptual framework of accounting
2- Tangible fixed assets
3- Particular standards on tangible fixed assets
4- Real estate investments
5- Intangible fixed assets
6- Particular standards on intangible fixed assets
7- Non-current assets and disposable groups of elements, held for sale
8- Leases and other operations of similar nature
9- Financial instruments. It distinguishes between financial assets and liabilities:
Financial assets. They are classified in one of the following categories:
- Loans and receivables.
- Investments held to maturity.
- Financial assets held for trading.
- Other financial assets at fair value with changes in the profit and loss account.
- Investments in the equity of group, multigroup and associated companies.
- Financial assets available for sale
Financial liabilities.
10- Inventories
11- Foreign currency
12- Value Added Tax (VAT), Canary Islands General Indirect Tax (IGIC) and other indirect taxes
13- Taxes on profits
14- Income from sales and service provision
15- Provisions and contingencies
16- Long-term staff compensation liabilities
17- Transactions with payments based on equity instruments
18- Subsidies, donations and legacies received
19- Business combinations
20- Joint ventures
21- Operations between group companies
22- Changes in accounting criteria, errors and accounting estimates
23- Events after the close of the fiscal year
3rd. Annual accounts
The annual accounts are composed of the following:
- Balance sheet
- Profit and loss account
- Statements of changes in net equity
- Cash flow statement
- Annual report
4th. Chart of accounts
The application of the chart of accounts shown is not mandatory. This is the main list of accounts:
Group 1 - Basic financing Group 2 - Fixed assets Group 3 - Inventories Group 4 - Creditors and debtors Group 5 - Financial accounts Group 6 - Purchases and expenses Group 7 - Sales and income Group 8 - Net equity expenses Group 9 - Net equity income
5th. Definitions and Accounting Relationships
It includes definitions of the content of each account as well as the series of most common charges and credits in their movements. Its application is voluntary.
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