The Commercial Code states that the notes to financial statements must complete, amplify and analyze the information contained in the balance sheet and income statement, and that a statement of changes in the financial position will be added in certain cases.

The minimum content of the notes to financial statements is specified in the Corporations Law and the Spanish National Chart of Accounts, and both pieces of legislation state that the notes to financial statements are an integral part of the document.

The notes to financial statements must contain, inter alia, the following information:

– Valuation methods applied to the various items in the financial statements and the methods used to calculate value adjustments.

– Name, address and legal form of investees in which the company directly or indirectly owns at least:

- 3% of the investee’s capital stock, if listed; or

- 20%, if unlisted, detailing the capital, reserves and income/loss of the investee in the last fiscal year (this information may be omitted if its inclusion could seriously harm the companies in question, provided that the fact that it has been omitted is disclosed).

– Statement of changes in financial position.

– Variations in fixed assets and in start-up expenses during the year.

– Classes of shares, if there are more than one, stating the number and par value of the shares belonging to each class.

– Founder’s shares, convertible debentures and similar securities and rights.

– Corporate debts with a residual term of more than five years and secured debts.

– Guarantees commitments to third parties, without prejudice to their recognition on the liability side of the balance sheet, if applicable.

– Pension commitments and commitments to group companies.

– Breakdown of net sales by specific areas of activity and geographical markets (this information may be omitted if its inclusion might seriously harm the enterprise in question, provided that the fact that has been omitted is disclosed).

– Average number of employees by professional category, together with personnel expenses for the year.

– Differences between book income/loss and the tax base arising from different recognition methods applied for tax purposes.
Deferred tax assets and liabilities.

– Salaries, attendance fees and other compensations earned during the year by the members of the managing body, and accrued liabilities for retirement pensions or payments of insurance premiums for current or former members of the managing body. This information must be disclosed on an overall basis, by type of compensation.

– Advances and loans to directors, disclosing the interest rates and main characteristics, and guarantee commitments assumed on their behalf, all on an overall basis for each category.

Additionally, the Spanish National Chart of Accounts establishes in the rules for the preparation of financial statements that the notes to financial statements must include any other additional information required to facilitate comprehension of the financial statements, so that they must present a faithful representation of the enterprise’s net worth, financial position and results.

Finally, various resolutions of the ICAC, industry-specific adaptations of the Spanish National Chart of Accounts and tax legislation establish requirements relating to the disclosure of certain additional information in the notes to financial statements.