LESSON 8: FINANCIAL STATEMENTS
8.1. Issue and content of financial statements
Art. 253 LSC imposes on the directors of the company, as a manifestation of their management
function, the duty of issuing the following documents:
a. annual financial accounts/statements (cuentas anuales);
b. management report (informe de gestión);
c. proposed distribution of earnings;
d. as appropriate, the consolidated financial statements and management report
(group of companies).
Deadline of three months from the end of the financial year to issue the mentioned documents
(Art. 253.1 LSC).
Annual financial accounts/statements
>> Content: 5 documents showing a true and fair view of the company’s net worth, financial
position and net income.
•Balance sheet: summarizes a company’s assets, liabilities and shareholders’ equity at a
specific point in time.
•Income statement: reports a company’s financial performance over a specific
accounting period.
•Statement of the changes in the net worth for the financial year: identifies any
transactions that alter the net assets of the company.
•Cash flow statement: provides aggregate data regarding all cash inflows a company
receives from its ongoing operations and external investment sources, as well as all
cash outflows that pay for business activities and investments during a given quarter.
•Notes or report on all the aforementioned documents: document that completes, extends
and comments on the contents of the other documents that form the annual financial
accounts.
8.2. Financial statement audit
8.2.1. Duty of auditing
