I

The General Accounting Plan (PGC) approved by Royal Decree 1514/2007 of 16 November, collects in its Second Part the rules of registration and valuation that develop accounting principles and other provisions contained in the first part relating to the Conceptual Framework of Accounting. This Resolution constitutes the regulatory development of the registration and valuation criteria for the determination of the cost of production.

To this effect, the Final Disposition third of Royal Decree 1514/2007, of 16 November, enables the Accounting and Audit Institute of Accounts (ICAC) to approve, by resolution, rules of mandatory compliance that develop the abovementioned Plan and its complementary rules, in particular with regard to the rules for registration and valuation, and the rules for drawing up annual accounts.

Similarly, the Final Disposition of Royal Decree 1515/2007 of 16 November, approving the General Plan for the Accounting of Small and Medium-sized Enterprises (PGC-SMEs) and the specific accounting criteria for microenterprises, sets the following:

" The normative developments of the General Plan of Accounting that are approved by virtue of the ratings set out in the final provisions of Royal Decree 1514/2007 of 16 November, approving the General Plan Accounting, they will be of compulsory application for companies that implement the General Plan of Accounting of SMEs.

In case of any distinct aspect for Small and Medium-sized Enterprises, in such regulatory developments, mention is made of this circumstance. "

Finally, the final Disposition third of Royal Decree 1159/2010, of 17 September, approving the Rules for the Forms of Consolidated Annual Accounts (NFCAC), expresses: " The Institute of Accounting and Audit of Accounts may, by means of a resolution, approve binding rules to develop this text and, where appropriate, adaptations to be adopted under the provisions of the preceding paragraphs. "

In line with the above, it is necessary to establish a rule that clarifies the criteria that, in general, must be taken into account in order to carry out this assessment, based on the provisions of the PGC and the Resolution of 9 May 2000 of this Institute laying down criteria for determining the cost of production.

In particular, in the First Party of the PGC, the Accounting Conceptual Framework (MCC), and in the Second Part, Standards of Registration and Valuation (NRV), reference is made to the cost of production as a criterion for the assessment of elements heritage, as developed below:

MCC paragraph 6 Assessment criteria:

" 1. Historical cost or cost:

The historical cost or cost of an asset is its purchase price or production cost.

(...)

The cost of production includes the purchase price of the raw materials and other consumable materials, the price of the factors of production directly attributable to the asset, and the fraction that reasonably corresponds to the costs (a) production indirectly related to the asset, to the extent that they relate to the period of production, construction or manufacturing, are based on the level of use of the normal working capacity of the means of production and are necessary for the putting of the asset under operating conditions (...). "

NRV 2. Inmobilized Material:

" 1. Initial assessment:

Goods included in the tangible fixed assets shall be valued at their cost, either the purchase price or the cost of production.

Indirect taxes on the assets of tangible fixed assets will only be included in the purchase price or cost of production when they are not directly recoverable from the Public Finance.

It shall also form part of the value of the tangible fixed assets, the initial estimate of the current value of the assumed liabilities arising from the decommissioning or withdrawal and other associated with the asset, such as the costs of rehabilitation of the place on which it is based, provided that these obligations result in the registration of provisions in accordance with the provisions of the applicable law.

For immobilized persons who need a period of more than one year to be in conditions of use, the purchase price or production cost shall include the financial expenses that have become due prior to the under conditions of operation of tangible fixed assets and which have been provided by the supplier or correspond to loans or other types of financing other than, specific or generic, directly attributable to the acquisition, manufacture or construction (...).

1.2 Production Cost:

The cost of production of the elements of the immobilized material manufactured or constructed by the company itself will be obtained by adding to the purchase price of the raw materials and other consumable materials, the other costs directly imputable to such goods.

The share that reasonably corresponds to the costs indirectly attributable to the goods in question shall also be added to the extent that such costs correspond to the manufacturing or construction period and are necessary for the placing of the asset under operating conditions. In any event, the general criteria for determining the cost of stocks shall apply. '

NRV 3. ª Particular rules on fixed assets:

" In particular, the following rules shall apply with respect to the goods that are indicated in each case:

(...)

b) Constructions. Its purchase price or cost of production shall be composed of, in addition to all those installations and elements which are of a permanent nature, the fees inherent in the construction and the optional project and management fees. works. The value of the land and buildings and other buildings shall be assessed separately. '

NRV 10. Existence:

" 1. Initial assessment:

Goods and services included in stocks will be valued at their cost, either the purchase price or the cost of production.

Indirect taxes on stocks will only be included in the purchase price or cost of production when they are not directly recoverable from the Public Finance.

In stocks that require a period of more than one year to be in a position to be sold, they shall be included in the purchase price or cost of production, the financial expenses, as provided for in the rule on the immobilised material (...).

1.2 Production Cost:

The cost of production will be determined by adding to the purchase price of raw materials and other consumable materials, the costs directly attributable to the product. The proportion of the costs indirectly attributable to the products in question must also be added to the extent that such costs correspond to the period of manufacture, production or construction, in which they are has incurred the location for sale and is based on the level of use of the normal working capacity of the means of production. '

Consequently, according to the criteria listed in the PGC, the traits or characteristics that delimit the model to determine the cost of production are as follows: the cost is quantified from a cost model complete actual costs incurred during the manufacture, manufacture or construction of the product; the distribution of the indirect costs of production must be carried out according to the level of use of the normal production capacity of the undertaking; and include the company's inactivity or sub-activity costs in respect of the financial year (or exercises) of manufacture, manufacture or construction.

On the other hand, in the context of the 1990 PGC, on the occasion of certain sectoral adaptations, specific rules have been collected in respect of the cost of production applicable to the sectors of activity to which the These adjustments are addressed, inter alia, the Rules of Adaptation of the General Plan of Accounting to Construction Companies, approved by Order of 27 January 1993 of the Ministry of Economy and Finance, the Rules of Adaptation of the General Plan Accounting for Sports Federations, approved by the Order of the Ministry of Economy and Hacienda of 2 February 1994, the Rules of Adaptation of the General Plan of Accounting for Real Estate Companies, approved by Order of 28 December 1994, of the Ministry of Economy and Finance and the Rules of Adaptation of the General Plan of Accounting for companies in the wine sector, approved by the Order of the Ministry of the Economy of 11 May 2001.

Royal Decree 1514/2007's fifth transitional provision, dated 16 November, points out that the sectoral adaptations and other development provisions in the accounting field in force at the date of publication of that royal decree, will continue to apply in all cases that do not object to the provisions of the Code of Commerce, the Capital Companies Act and the PGC itself. It is therefore appropriate to conclude that the companies which were applying the sectoral adaptations of the PGC of 1990, in the financial years started on 1 January 2008, are obliged to follow the new PGC, without prejudice to the possibility that they may continue to consider the criteria included in the adaptations as an appropriate interpretative reference in all that does not oppose the new PGC or its development provisions.

In addition, the Resolution of March 1, 2013, of the Accounting and Audit Institute, for which rules for the registration and valuation of material and investment assets are issued, has recently been published. property and the Resolution of 28 May 2013, of the Institute of Accounts and Audit of Accounts, for which rules of registration, valuation and information are given to include in the memory of intangible fixed assets. They also have an impact on certain aspects related to the cost of production.

On the basis of all the above, it follows the need to delimit and establish the criteria for quantifying the cost of production, by developing the relevant rules for the registration and valuation of the PGC and, at the same time, time, collection and clarification of the criteria for determining the cost of production included in the different sectoral adaptations of the PGC and in the resolutions and consultations issued by this Institute.

II

The Resolution is divided into fifteen rules:

First. Scope of application.

Second. Production cost.

Third. Direct production costs.

Fourth. Indirect production costs.

Fifth. Joint production.

Sixth. Mermas in productive processes.

Seventh. Marketing and post-sale expenses.

Eighth. General administration or company management expenses.

Ninth. Financial expenses.

10th. Foreign currency exchange differences.

11th. Methods of valuation of stocks.

12th. Cost of the stock in the provision of services.

13th. Particular rules.

Fourteenth. Information to include in memory.

15th. Entry into force.

The First Rule regulates the scope of application. It is clarified that the Resolution is a development of the PGC, the PGC-SMBs and the NFCAC which must be applied by all companies, whatever their legal form, both in the formulation of the individual annual accounts and, where appropriate, in the drawing up of consolidated accounts.

From an objective point of view, it is established that it will be applicable for the determination of the cost of production of the stocks, understood as such, both the goods produced and the services provided by the company. It will also be applicable to the determination of the cost of production of the assets of the fixed assets, although in this case it will be necessary to take into account the necessary terminological adaptations according to the nature of the asset to build. Accordingly, this Resolution should be understood as applicable to both stocks and immobilized, without prejudice to the explicit references made in the Ninth Standard to the current fixed assets and to stocks which need a period of a time exceeding one year to be under operating conditions, for the purpose of regulating the allocation of financial expenditure on the cost of production of these assets.

If the scope of application is compared to international regulation, it is appreciated that in the International Accounting Standard 2 Stocks adopted by the European Union (hereinafter, NIC-UE 2) are excluded from their scope to the agricultural and forestry products, minerals, and listed commodity intermediaries, if they measure their inventories at fair value. In the Spanish standard, these exclusions cannot be made and, consequently, all these products must be valued at the historical cost, either because it has not been considered appropriate to extend the fair value to biological products so far, or either because the current wording of Article 38ibis of the Trade Code prevents the use of the fair value criterion from the stocks of the listed commodity intermediaries.

The Second Standard is dedicated to the definition of the cost of production, for which the calculation must take into account the costs directly attributable to the product (raw materials and consumables, direct labor, etc.), as well as the party that reasonably corresponds to the costs indirectly attributable, to the extent that such costs correspond to the production, construction or manufacturing period, are based on the level of use of the normal working capacity of the the means of production and are necessary for the placing of the asset under operational conditions.

When assessing whether the asset is in operating conditions, judgment is required, as for any other estimate made by those responsible for making the annual accounts. This analysis must be carried out objectively, without therefore being able to justify different dates in which assets, with homogeneous economic characteristics, are in operating conditions, nor to delay the accounting consequences of this. would be derived based on pending tests, if they were irrelevant to the function or destination that the asset is going to meet; this is, in relation to the fixed asset, to identify when the asset is in the conditions of entry into operation, and in respect of stocks to assess whether the asset is in a position to be transmitted to third parties.

However, since, for example, assessing the effective implementation (full or regular) of an element of fixed assets may not be entirely evident in certain cases, from an economic perspective. This would be the case, unless proof to the contrary, where the revenue generated in the period of evidence exceeds the amount of the costs incurred, including the actual 'theoretical' depreciation of the asset in which the costs were incurred. from the date the revenue generation starts.

Similarly, in this Standard it is clarified that when the factors of production are acquired free of charge, by means of permuse, total or partial, or as a non-cash capital contribution, the regulated criteria will be applied in the Resolution of 1 March 2013, of the Accounting and Audit Institute of Accounts, for the delivery of rules for the registration and valuation of tangible fixed assets and real estate investments.

At this point, it may be appropriate to clarify the scope of the criterion set out in NRV 14. 1 when it is stated that no income shall be recognised in the swaps of goods or services of the same nature and value.

The swap of goods or services intended for traffic does not differ in substance from the permutts in which an element of the fixed assets is acquired. They are operations where as a means of payment the customer delivers a non-cash asset. Moreover, if the element acquired is fixed and the product marketed or manufactured by the company is delivered, two applicable rules, those provided for the acquisition of a fixed asset in the form of a fixed asset, are to be entered in the register of the transaction. permuse and for the delivery of the company's product in return for a fixed asset.

In such a case, it seems reasonable to assume that the swap must be classified as commercial from the perspective of the purchasing business (incorporation of the immobilized to the company's assets), and that the delivery of the product will lead to the recognition of an income as a net amount of the turnover.

As far as the valuation of fixed assets and income is concerned, based on the basic premise that non-monetary transactions, as well as monetary transactions, should be carried out in terms of economic equivalence, conclude that the choice of one or other fair value, the received or the delivered, will ultimately be conditioned by which of the two best meets the requirement of reliability that the annual accounts must meet.

When it comes to dealing with stock swaps, services in exchange for stocks, or services for services, the issue discussed was the assessment of these exchanges and whether any limit could be imposed on the The majority view was that of considering this rule as a precaution to the recognition of income as a net amount of the turnover when the transaction did not appreciate the amount of the revenue. economic exchange with commercial substance, that is, the delivery of the product to the final customer.

In application of this criterion, and in line with previous interpretations of this Institute, the permutts of homogeneous elements (for example, the permutts of fungible raw materials between two companies or the product swaps In the case of the case-law of the Court of State, the Court of State held that the Court of State held that the Court of State held that the Court of State held that the Court of collaboration between two companies with the aim of being more effective in their commercial work or end last, consisting in the delivery of the product to their respective customers. In this case, the assessment of the item received shall apply the criteria for non-commercial swaps.

On the other hand, when the company partially or totally externalizes its production process, without losing control of existing stocks or products (for example, in the so-called maquila operations), there is no to recognize revenue from the transfer, or expense for the subsequent delivery, but the service received by the company that performs the transformation. If the latter retains part of the production in return for the service provided, the conclusion does not vary. In such a case, the service received shall be assessed using the criteria for commercial swaps.

In the Second Standard it is also specified that the standard cost may be used by the company to determine the cost of the products provided that the result of the application does not differ from the actual cost of production, taking into account the principle of relative importance established in the MCC.

To this effect, the standard costs will be established from normal levels of consumption of raw materials, supplies, labor, efficiency and capacity utilization. If the conditions vary significantly, the company will need to review its initial estimates.

Another novelty of this Standard is the incorporation of the retailers ' method. Both the NIC-EU 2 and the AECA document on the subject (Document No. 8 "Stocks", prepared by the AECA Committee on Principles and Accounting Standards), express that the retailers ' method could be of recommended use in the retail trade, for the valuation of stocks, where there are a large number of items that are very frequently rotated, which have similar margins, and for which it is impracticable to use other methods of calculation costs.

In any case, it would be appropriate to note that this method does not constitute in strict sense a way to estimate the cost of production, but rather a procedure to estimate the value in books of the goods at the close of the exercise. For this purpose, once the value is obtained, the company must account, where appropriate, of the corresponding impairment loss if the recoverable amount of the stock is less than its value in books.

In the Third and Fourth Rules, the concepts of direct and indirect costs are defined; the difference between the two is that the direct costs are the consumption of factors inherent or that must be assigned, considering the principle of relative importance, to a product or to several specific products, since the relationship between the cost element and the product or products to which it is incorporated is clear, while in indirect costs it is relationship is not clear and therefore distribution criteria are needed for imputation to the product . In any case, it is necessary to differentiate between direct and proportional costs because there can be progressive or regressive direct costs, depending on the level of production to be performed.

In addition, in order to clarify possible doubts, it seems appropriate to refer to certain issues that have particular characteristics in terms of the allocation of costs, for example:

(a) Expenses for the impairment of property assets used in the manufacture of the product shall not be taken into account for the purpose of determining the cost of production.

(b) The assets used in the manufacture of the product which have been financed by a subsidy must also be considered; in this case, the assigned costs resulting from that element will not be reduced in the the amount attributable to that subsidy, thus safeguarding the fact that, as a general rule, the form of financing a good does not affect its purchase price or cost of production without prejudice to the criterion on the activation of financial expenses.

(c) Finally, in relation to these aspects, the cost of dismantling, withdrawing or rehabilitating the elements of the fixed assets used in the production process must be taken into account for the determination of the cost of production, to the extent that it will become manifest throughout its useful life.

Paragraph 2 of the Fourth Standard develops the rational criteria to be applied for the imputation of indirect costs, regulating the minimum aspects that ensure the rational application of the distribution of the indirect costs, taking into account the following:

a) The different areas that constitute the activity of the company and that happen to the prior supply, that is, manufacturing, administration, marketing, etc., must be differentiated.

(b) Indirect costs arising from the production, construction or manufacturing sector shall be imputable. In this respect, it is appropriate to clarify that the costs of administration, to the extent that they are specific to a particular manufacturing process, must be allocated to the cost of production, without prejudice to the general costs of the production administration or management, which in no case shall be part of the cost of production, as set out in the Eighth Standard of this Resolution.

(c) In relation to the differentiation of costs, generalised by the doctrine, between fixed costs-those that remain unchanged with the volume of production-and variable costs-those that are correlated with the volume of production (i) it is worth noting that the possible diversity in terms of the concept of some and others because the degree of variability in costs must be considered with respect to a certain level of productive activity and for a period of concrete time, together with the existence of mixed costs (half-or semi-fixed and (a) it has determined that this differentiation has been dispensed with in this Resolution, except as regards the costs of inactivity or sub-activity.

(d) As regards the sub-activity costs, it should be noted that they are not part of the cost of production, in compliance with the provisions of the PGC which it lays down as a requirement for the indirect costs to be imposed on them. are based on the level of use of the normal working capacity of the means of production. The measurement of sub-activity requires a prior approach to the costs incurred by a company over the productive capacity used; this is, the sub-activity will collect those costs incurred by a company for underutilisation. of their intended production capacity as normal, and should therefore be imputed to the result of the exercise. And all this, without prejudice to the fact that, in the event that the sub-activity is extended over time, that circumstance must be taken into account for the purposes of making, where appropriate, the appropriate value adjustments to the assets affected.

The Standard defines sub-activity costs from fixed indirect costs, i.e. those that do not vary in the short term with the level of production, establishing that they will be required to apply the ratio between the actual activity and the normal production capacity, understood as the one that would be given under appropriate conditions in rational economic terms; a theoretical definition that will require the corresponding value judgments by the management staff of the undertaking, of which the production which is expected to be considered is appropriate achieve in normal circumstances, considering the average of several periods or seasons, and taking into account the loss of capacity resulting from planned maintenance operations.

With regard to situations where there is above normal production capacity, in no case will higher fixed indirect costs be applied to those actually incurred in such a way as to never be valued at all. assets produced above the cost, as the Standard refers only to sub-activity costs, i.e. to cases where production is lower than the normal capacity of the means of production.

As a novelty, it should be noted that in paragraph four of the Fourth Standard, the treatment of research expenditure as costs of the product is incorporated under certain circumstances. In principle, research expenditure is not costs incurred in the manufacturing, manufacturing or construction phase of the asset and therefore in a literal interpretation of the PGC they should not be part of the cost of production.

However, in a "broad" interpretation of the concept of cost of the product, it may be argued that the depreciation of the research costs is an indirect cost of production as long as it has a direct relationship with the production process. In contrast, research and development expenditure accounted for as expenditure for the period would not be part of the cost of production.

According to this criterion, without prejudice to the fact that research expenditure is more related to the costs of future production than with the present, it is no less certain that its rating as a cost of the product is consistent with a "broad" approach to the concept of production cost understood as the cost of the "product cycle". To this end, in order to be able to appreciate this idea of future economic projection, in the Resolution the qualification as cost of the product is conditioned to the fact that the research expenses have been previously activated and object of depreciation.

Finally, it is important to bear in mind that production costs must be imputed to the product until the product is finished, that is, until it is in a position to be used for final consumption or for use by other companies.

In the Fifth Joint Production Standard, criteria are established for the allocation of the joint costs to two or more products obtained simultaneously in the production process. To this end, it is indicated that the distribution of these joint costs will take place, in the generality of the cases, with the orientation that they are the most parallel or proportional to their net realizable value. In this respect, it is necessary to specify that where, for reasons of management, a common production is carried out, in so far as this is a decision of the undertaking, the cost of production must be quantified in accordance with the general criteria.

This Standard also provides for cases where in the production process additional by-products, residues, wastes, waste or recoverable materials are obtained, defining them and regulating their assessment. In addition to the previous Resolution of the year 2000, the case in which the waste has a negative net realisable value is added, establishing that the separable cost of the waste will be added to the cost of the main product.

The mermas, that is, the losses of an irreversible character derived from the nature of the productive activity in a broad sense (from its incorporation to the company until its departure), appear in the Sixth Standard, assuming as a rational criterion for their accounting consideration, the time when they are produced, forming part of the cost of production originated during the manufacturing process, whereas, on the other hand, the goods produced in the finished products are not part of the cost of production of the product and will be reflected as a loss of the exercise in which they take place. In the event of exceptional losses occurring, losses and gains shall be recorded in accordance with that nature.

In the Seventh Standard, the treatment of marketing expenses and post-sale expenses of the product is regulated, indicating that they are not part of the cost of production in the measure of costs that are not correspond to the manufacturing period.

For its part, the Eighth Standard is devoted to general administrative or management expenses by establishing, as a general rule, that they will not be part of the cost of production either, without prejudice to the costs of specific administration of the manufacturing scope.

At the time of judging the practical application of this criterion, different scenarios have been analyzed:

(a) First, those companies whose exclusive social object is the construction of an asset. In such a case, the majority of the administrative costs incurred in the construction period are likely to be part of the cost of the asset in so far as the main activity developed by the company is the construction of the asset. and, therefore, the specific production activity centralizes the consumption of the majority of the resources that are destined for the administrative expenses. However, it cannot be concluded that all the administrative costs incurred by the company in that period should be incorporated in the value of the asset as a higher cost.

b) Secondly, the assumption that the company builds an asset for its subsequent exploitation, in which the same criterion should be applied during the construction phase.

c) Third, the case in which a company at a given time or time interval will undertake an increase in its capacity (e.g. internal growth of its dimension or modification of its facilities, expansion (a) the extent to which, in accordance with the conditions laid down in Article 3 (1) of the Regulation, the Commission may, in accordance with the conditions laid down in Article 3 (2) of the Regulation, be required to take the necessary measures to ensure that the definition of the cost of the asset under construction. Another thing would be how to look for or identify a suitable segregation mechanism in order to isolate the two components that would integrate the administrative expenses; that is, the ones that should be accounted for in the result of the period and the expenses to recognize as higher cost of the asset.

(d) Finally, the most common assumption in practice which would be related to the cost of production of stocks, for the purposes of concluding that part of the general administrative costs, if any, could be qualified as specific. However, without denying that the disbursements made by that concept partially increase the value added of the product, in this case, it is perhaps the most appropriate to account for the above expenses in the profit and loss account for the difficulty in identifying what specific amount should be recognised as cost and what other amount as the expenditure of the period, as well as the limited impact that this would have on the assumption that the volume of production and sale of the company was maintained constant.

In the Ninth Standard of this Resolution, the incorporation of financial expenses as a higher value of the ongoing fixed assets and of the ongoing long-cycle stocks, that is, those stocks whose process of manufacturing is more than one year, without taking into account the interruptions, in the development of the treatment provided for in the PGC and in line with the methodology foreseen in the NIC-EU 23 Interest Costs.

The rating of the capital factor-time as cost of production, i.e. the rating as the cost of the product of the remuneration of the capital employed in the production process, has been a widely debated issue by the doctrine, there are arguments for and against such a rating.

Thus, some argue that it is clear that the use of capital-time represents a cost factor which, irrespective of the legal nature of the source of financing, should be integrated into the cost of production as a more of this ingredient. In this sense, although the magnitude of the cost of production of the asset under construction or production is higher than the amount of the company's sources of finance, they believe that the portion of the asset financed with equity also it would justify the accrual of a component of the cost of production, only by not implying an explicit accrual of interest payable to the lenders should be recognised as an implicit income of the company. This income could be accounted for as a minoron of interest earned on foreign financing attributable to the profit and loss account. In any case, after considering the capital-time factor, the cost of the asset could not exceed its recoverable amount.

On the contrary, others argue that the way to finance the construction, manufacture or production of an asset should not affect the cost of production. Firstly, because capital itself does not represent an explicit cost (financial costs) and therefore could not be described as a factor in the real cost and ultimately because those who defend this thesis believe that the cost of financing This is a cost or remuneration of the debt rather than a factor in the cost of production of the asset. If this approach were to be followed, the value in books of the product under construction, manufacturing or manufacturing would be avoided as a dependent variable and proportional to the level of indebtedness of the company, with higher borrowing greater value of assets, and would achieve greater comparability of financial information.

In view of these arguments, the Spanish standard adopts an intermediate position and in this sense the PGC approved in 2007 provides that in assets that need a significant period of time (exceeding one year) for be in a position to comply with the function which is of its own, shall include in the purchase price or production cost the financial expenses (i.e. the express or actual and non-implied remuneration of the capital employed) which have become due up to that date (entry into operation for the immobilised or in conditions of being used for the purposes of the stocks) and which have been provided by the supplier or correspond to loans or other types of financing other than, specific or generic, directly attributable to the acquisition, manufacture or construction.

In PGC development, the following aspects are regulated in the Ninth Standard:

(a) You identify the activatable financial expenses as those that arise from the use of financial resources outside the company, both specific and generic, for the development of your activity.

(b) It is clarified that the 'fit' assets to capitalise on accrued financial expenses are long-cycle stocks and fixed assets under construction when the time limit for operating conditions exceeds the year, in both cases, which are covered by the amount of grants, donations or legacies received for financing. This is, unlike the specific funding with own funds, which does not undermine the cost of the asset, in the case of receiving a grant to finance the acquisition of an asset, the grant will be the first financing specifies to consider, albeit at zero cost. If the grant, in turn, brings about a subsidised loan the financial expense of the loan will be the incremental or market interest rate.

(c) The criterion established in the past to identify activatable financial expenses is revised in respect of the treatment of own funds. The amendment is due to the search for the highest level of convergence with the NIC-EU in all accounting treatments considered appropriate from the perspective of the objective of the faithful image. At this point it is necessary to note that the way of considering financing affects the construction or manufacture of the asset, that is, the priority to identify the sources that finance the asset, has traditionally been a mere accounting convention influenced in its approach to a greater or lesser extent by the general approach which has presided over the debate on capital factor time as a cost of the product.

Therefore, as indicated, the change that is now being introduced into the methodology simply obeys the search for further harmonisation with the convention itself included in the international standard of reference.

d) In the activation of financial expenditures on land, the doctrine of this Institute is reviewed on the concept of "necessary actions".

e) The capitalization of financial expenses should be suspended during interruptions occurring in the manufacturing or construction process, in the terms specified in the Standard. However, in contrast to the criterion maintained to date, it has been considered appropriate to review the treatment of the activation of financial expenditure in land and solar by equating the activation period to that provided for the construction of the building, considering that it will be at that time, to the completion of the construction, when the asset, as a whole, is in a position to generate income.

Without prejudice to the foregoing, and in the case of point (d), it is necessary to note that the rule for the activation of financial expenses cannot be interpreted as an automatic process of accumulation of costs in the value of the This is the logical process of incorporating the cost of a factor of production, the capital-time, depending on the circumstances that would be required in conditions of normality for the transformation of the active, that is, those that would be given in suitable conditions in rational economic terms.

f) Finally, in the Resolution, the interpretations of this Institute on other aspects related to this matter, such as the criterion to be followed to show in the profit and loss account the activation of the financial costs and what treatment comes from where the sources of financing have been temporarily invested and, as a result, generate revenue.

With regard to this issue, as provided for in the international standard of reference, it is necessary to clarify the criterion published by this Institute when part of the funds obtained to finance the construction of an asset are temporarily placed on restricted accounts (which generate a return) pending the application of the funds to the investment. Well, in such a case, the net cost produced (expenditure minus financial income) is considered to be the indicator of the actual amortised cost of the debt as the deposits are always linked to cover future investment payments.

g) The activation of financial expenses on assets under construction, manufacturing or production, from the perspective of consolidated annual accounts, may include, inter alia, the following particularities.

The treatment of the financial expenses incorporated as a higher cost of the stock of a real estate company originated by the perceived financing of its dominant company, when such stocks have not been realized against third parties outside the group, remaining in the real estate company, implies that since the financial expenditure is incorporated in the individual accounts as the highest value of an asset (stock of real estate), in the consolidated annual accounts the result produced in the transaction must be removed (in this case for the amount of the accrued financial income). The accounting value of stocks for that amount shall be corrected simultaneously until this result is carried out vis-à-vis third parties (in general, where the stocks are held to third parties) or when one of the companies participants in the operation no longer be part of the group, as long as the asset that incorporates the result does not remain within the group.

On the other hand, it is common for some groups to use centralised systems to manage their cash (cash pooling). If, pursuant to these agreements, the treasury of all the companies in the group is centralised in a company of the group, by granting credits and reciprocal debts between the subsidiaries and the parent (if the latter acts as 'centralising') or a company or branch set up ad hoc for this purpose, the accounting consequences of these structures, in individual and consolidated annual accounts would be as follows: (i) in the individual annual accounts, the transfer of resources and, where appropriate, the provision of services between the companies of the group in any event should be remunerated in terms of fair value, and (ii) in the consolidated accounts should be eliminate credits, debts, income and reciprocal financial expenses.

Finally, when the book value of an asset under construction exceeds the amount of the specific financing, the average type of generic financing may differ in the individual and consolidated annual accounts. If the difference is significant, two possible solutions could be found according to the background and circumstances of the case: (i) to consider that the generic financing of the company holding the asset on its balance sheet, from the group's perspective, it should be classified as specific financing and, consequently, not to amend the calculations made at an individual level, or, (ii) alternatively, to require recalculating the effective weighted average rate of the group's generic financing as an entity which informs and introduces the corresponding adjustment. Except for better evidence to the contrary, it is considered that the first of the proposed solutions allows in most cases to achieve the objective of the faithful image.

With the objective of collecting these criteria, in the first section of the ICAC, it has been stated that the Resolution will be mandatory: " ... both in the formulation of the individual annual accounts and in the elaboration of the consolidated accounts. In such a case, the criteria included in this Resolution shall be applied taking into account the status of the group of companies as an accounting officer or reporting entity. '

(h) According to the Resolution of the fifth resolution, the companies that have been activating the financial burden will follow the new criterion for the financial expenses accrued from 1 January 2015, without therefore being an application to the letter of the criteria on this matter declared in force to date (not to be opposed to those collected in the PGC), and of those that are now approved to replace those.

The 10th Standard deals with foreign currency exchange differences. Unlike its antecedent, the PGC 2007 does not establish any express regulation on the accounting treatment of exchange differences from the perspective of the cost of production. Therefore, in principle, it appears that they should only be considered as such, the cost of the asset, in so far as they can be classified as an adjustment to the interest rate of the financing, in line with the provisions of the international standard of reference. However, it is no less true that the current PGC 2007 does not expressly prohibit the treatment of this regulated matter in the PGC 1990.

When the company is indebted in a foreign currency the cost of financing has two components: interest expense (i.e., the functional currency equivalent of the financial expenses incurred in application of the cost). amortised to the foreign currency liability) and the exchange differences associated with the cancellation of the debt (including interest-bearing debt). In addition, at the end of the financial year, a new exchange rate difference shall arise when the foreign currency liabilities that appear on the company's balance sheet are recorded at the exchange rate.

When you analyze whether both components (or part of each) should be rated as financial expenses, for the purposes of capitalizing on that financial burden as the higher value of an asset under construction or manufacturing, discussed various approaches.

First, to consider that all expenses incurred during the financial year, in terms of interest and exchange differences, constitute an adjustment to the interest rate and are therefore liable to capitalize as a cost production. Those who support this approach also claim that if the differences in exchange were positive and for an amount higher than the financial expense, the excess would be recognised as an adjustment to the cost of the asset.

The second solution discussed was to limit the foreign currency's activable financial expenditure (in terms of interest and exchange differences) to the interest expense that would have been incurred if the company had opted for to borrow in functional currency.

Finally, it would also be possible to argue that when the company chooses to borrow in foreign currency the financial cost of the operation has two components that cannot be dissociated, the financial expenditure in the strict sense and the difference of change. In order to reflect the true picture of the transaction, in theory, the effective interest rate should be calculated in functional currency from the spot exchange rate in each closure. Well, such a theoretical effective interest rate for each financial year could be taken as a limit for the purposes of considering the difference of change that would qualify as an adjustment to the interest rate of the transaction.

After weighing the arguments for and against each alternative, a mixed solution has been included in the RICAC depending on the specific or generic character of the foreign currency debt. Thus, when the company acquires (build or manufacture) an asset in foreign currency, the incorporation into the balance sheet must be carried out in a functional currency and spot exchange rate. In this case, it may be customary for the company to finance the foreign currency asset with the objective of associating the risk of exchange rate from the asset to the exchange rate risk of the specific financing.

In this case, it is considered that the solution that would best reflect the faithful image would be to link the cost of the asset, to the date of entry into operation, with the risk of debt exchange, which from the point of view of the question discussed, in essence, would lead to to qualify the difference of exchange not as much as an adjustment to the interest rate of the debt but rather as an adjustment to the price of acquisition of the asset and, consequently, to follow the solution in force in the PGC of 1990 with some clarifications. Thus, it has been collected, autonomously, in the Resolution Decimal Standard without this implying a change in the financial nature of the difference of change so that this factor of the cost will also apply to them the same limitations provided for in the Ninth Standard for financial expenses (start, break and cease).

On the contrary, if the economic link between assets and financing is not appreciated in the transaction, in order to preserve the difference between the cost of the asset and the cost of the debt, it has been considered that the most appropriate to describe the difference in exchange as an adjustment in the strict sense of the interest rate of the transaction, and to limit the difference in exchange to capitalizing on the cost incurred if the company had chosen to finance itself in functional currency.

In the Eleventh Standard, dedicated to stock valuation methods, changes of more entity appear because only two valuation methods are allowed in the PGC: the weighted average cost, as a priority method, and the FIFO. In addition, the content of paragraph 1.3 is developed. Methods of value assignment of the NRV 10. th PGC stock in the following terms:

(a) In accordance with the international reference standard, the methods of value allocation, weighted average cost and FIFO are defined, without prejudice to the mandatory application of the principle of uniformity. In this regard, it is necessary to clarify that the different geographical location or tax differences will not be sufficient to justify the application of different methods of value allocation.

b) The timing of the application of the methods of ordering of entries and exits of stock is given.

c) It is recalled that the purchases returns will be imputed as a lower value of the stock object of return.

d) The incorporation into the inventory of the company of stocks from sales returns will be made by the purchase price or production cost that corresponds to those stocks, according to the method of sorting of entries and outputs of used stock. However, in the event that the net realisable value is lower than the purchase price or cost of production, it is clarified that the general rules on asset value impairment need to be applied.

e) "rappels" for purchases or discounts by volume and other discounts and similar ones originated for non-compliance with the conditions of the order that are after the receipt of the invoice, will be charged directly as minor value of the stocks to which they correspond. In the event that a portion of these stocks have been disposed of or discharged, the "rappels" shall be recognised in the profit and loss account as a lower consumption of stocks. In short, only to the extent that these "rappels" and discounts can be reasonably imputed to a defined set of purchases, known at the end of the financial year, will be considered to be lower than those stocks to which they were imputable and in proportion to the discount granted.

According to the above, the "rappels" for purchases or discounts by volume and other discounts and the like originated by default of the conditions of the order that are after the receipt of the invoice, at the closing of the exercise, shall be counted:

e.1. As a lower value of those stocks to which they were imputable and in proportion to the discount granted, or

e.2. If the stock has been disposed of or discharged, such as lower stock consumption.

When the "rappel" is received in the following year, this same criterion will be applied and the impact resulting from the discount received will be accounted for by applying the general criteria for post-closure events. exercise.

(f) In any event, the criterion used for stock valuation shall be maintained uniformly over time and shall be applied in a systematic manner to the set of the company's stock, in accordance with the principle of uniformity; in the event of a change of accounting criteria, the rule of record and valuation of changes in accounting criteria, errors and accounting estimates of the General Accounting Plan shall be considered.

The 12th Standard clarifies the applicable criteria for calculating the cost of stocks in the provision of services. According to the General Accounting Plan, stocks are assets owned to be sold in the normal course of the holding, in the process of production (of an asset of a tangible or intangible nature) or in the form of materials or supplies to be consumed in the production process or in the provision of services.

In view of this definition, the following observations can be made on the specific scope of the stock of services.

The General Accounting Plan, in the inventory and inventory rule, sets out:

" 1.4 Cost of Stock in Service Delivery:

The criteria set out in the preceding paragraphs will be applicable to determine the cost of the stock of the services. In particular, stocks shall include the cost of production of the services as long as the corresponding service provision has not yet been recognised in accordance with the provisions of the revenue and sales income standard services. "

For their part, the rule on the recognition and valuation of service income provides as a general rule that, where the outcome of the transaction involving a provision of services can be estimated at reliability, revenue shall be recognised as a percentage of the performance of the service at the end of the financial year. Where such an estimate is not possible, the revenue from the provision of services shall be counted only in the amount in which the recognised expenditure is considered to be recoverable.

In the Thirteenth Standard, various criteria issued by this Institute through consultations and various special precepts on the cost of production have been collected and nuanced, depending on their compatibility with the PGC. included in the sectoral adaptations adopted before 1 January 2008.

Thus, for example, in relation to the cost of awarding contracts in construction companies, this Institute considers that in order to be able to activate the costs referred to in Rule 13 (1) (b) required that the following requirements be met:

(a) Only technical expenses directly related to the contract in question and of incremental nature may be qualified as an asset. This is, the expenses incurred on the occasion of the corresponding tender and not those related to general administrative functions of the company.

b) In order for the realized disbursements to qualify as an asset, they must be separately identifiable and reliably measurable.

c) Additionally, the contract should be likely to be obtained.

In relation to the construction companies it is also recalled that under the new PGC the so-called "method of contract fulfilled" is no longer applicable, as established in consultation 2 of the BOICAC No. 78. In the sectoral adaptation applicable to these enterprises, and in order to account for the effects of the application of this method, a number of accounts classified in subgroup 34, known as 'works in progress', were broken down, where the cost of "units of work that are in formation or partial execution at the end of the financial year and which have not been computed as sales or turnover".

Therefore, since this method has been abolished, the impact of the partial execution works that have not been recognized as sales is not a discussion of the cost of production of the stocks, but of the rules on recognition of income according to the degree of advancement. In application of this method, the possible differences between the degree of execution of the works and the recognition of income are not reflected in stock accounts, but in the accounts of clients or creditors, in particular in the accounts " Customers work executed pending certification "(434) or" Customers certified in advance " (439).

As a result, it is appropriate to state that in the context of the criteria for the recognition of revenue for construction contracts, stocks are limited to certain items such as material or advance costs which are consume as expenditure as the service is provided, but in no case would they include the concepts covered by the so-called "contract met method".

The Fourteenth Standard has been included on the information to be included in the annual accounts. In the previous Resolution, the requirements for information to be included in the memory were disseminated by the different standards, opting in the present to collect these requirements in a specific standard. In addition, new requirements are added in line with International Accounting Standards, such as those for capitalized financial expenses and the weighted average interest rate.

A standard for stock value corrections was included in the production cost resolution of the year 2000. This resolution has obviated this theme by being already included in the Resolution of 18 September 2013, by the Institute of Accounts and Audit of Accounts, by which rules of registration and valuation and information to be included in the memory of the annual accounts on the impairment of the value of the assets.

Finally, a Decimal-Fifth Rule has been included on the entry into force of the Resolution, which, in its nature as a rule of law with the capacity to amend the existing legal regime, clarifies that the criteria in it Those regulated which expressly amend those approved by the Resolution of the year 2000 shall be applicable in a homogeneous and non-retroactive manner to the financial years started on or after 1 January 2015. Therefore, there is no application to the letter by the companies of the criteria declared in force to date, because they do not oppose the PGC criteria, and of those that are now approved in place of the previous ones.

All this, without prejudice to the fact that the criteria that are now published can be taken before that time as an appropriate benchmark for calculating the cost of production, in so far as they do not entail a change from the treatment regulated accounting expressly to date.

For all of the above, as a consequence of the need to develop the rules of registration and valuation of the PGC regarding the determination of the cost of production, and the Standard for the Form of the Annual Accounts Consolidated, this Institute of Accounting and Audit of Accounts, according to the final Disposition third of Royal Decree 1514/2007, of 16 November, and the final Disposition third of Royal Decree 1159/2010, of 17 September, gives the Next Resolution:

INDEX

First. Scope of application.

Second. Production cost.

Third. Direct production costs.

Fourth. Indirect production costs.

Fifth. Joint production.

Sixth. Mermas in productive processes.

Seventh. Marketing and post-sale expenses.

Eighth. General administration or company management expenses.

Ninth. Financial expenses.

10th. Foreign currency exchange differences.

11th. Methods of valuation of stocks.

12th. Cost of the stock in the provision of services.

13th. Particular rules:

1. Construction companies.

2. Real estate companies.

3. Companies in the wine sector.

4. Sports federations.

Fourteenth. Information in memory.

15th. Entry into force.

PRODUCTION COST DETERMINATION CRITERIA

First. Scope of application.

1. This Resolution develops the criteria for determining the cost of production, regulated in the General Accounting Plan, the General Plan of Accounting for Small and Medium Enterprises and the Rules for the Forms of Annual Accounts. Consolidated.

2. As a result, without prejudice to the following paragraph, this Resolution is mandatory for all undertakings, irrespective of their legal form, which should apply those rules, both in the formulation of the individual annual accounts as in the drawing up of consolidated accounts. In such a case, the criteria included in this Resolution shall be applied taking into account the status of the group of companies as an accounting officer or reporting entity.

3. This Resolution shall apply, in general, to the determination of the cost of products-goods and services-of stocks, whether or not they are manufactured or manufactured by the entity.

4. It is also applicable, with the necessary terminological adaptations, for the determination of the cost of the fixed, material or intangible, manufactured or constructed by the entity, in whole or in part.

Second. Production cost.

1. The cost of production shall consist of the purchase price of the raw materials and other consumable materials, as well as the other goods or services consumed and directly imputable to the asset. The share that reasonably corresponds to the costs indirectly attributable to the asset must also be added, in so far as such costs correspond to the production, construction or manufacturing period, based on the level of use of the the normal working capacity of the means of production and are necessary for the putting of the asset under operational conditions, that is, to enable them to comply with the function that is appropriate to it or according to their accounting classification.

2. Where production factors are acquired free of charge, by means of a swap, total or partial, or as a non-cash contribution, the criteria laid down in the Resolution of 1 March 2013 of the Institute of Accounting shall apply. and Audit of Accounts, for which rules of registration and valuation of property and property investments are dictated.

3. In any case, they will be part of the cost of production of the fixed assets:

(a) The costs incurred on the occasion of the necessary tests or trials to be carried out to ensure that the asset is in a working condition and that it can participate fully in the production process. These expenses will be spent on income generated by the asset during that period. When revenue exceeds expenses, the excess will lower the production cost of the asset.

On the other hand, expenditure and revenue related to ancillary activities which may be carried out with the fixed assets, before or during the manufacturing or construction period, shall be recognised in the loss account and profits according to their nature, provided that they are not essential for putting the asset under operating conditions.

b) Costs for decommissioning or withdrawal and rehabilitation costs as provided for in the Resolution of 1 March 2013, by the Accounting and Audit Institute of Accounts, for which registration rules are issued and valuation of tangible fixed assets and real estate investments.

4. Without prejudice to the foregoing, the standard cost may be used by the undertaking to determine the cost of the products provided that the result of the application does not differ from the cost of production defined in paragraph 1 of this standard, the principle of relative importance counts.

To this effect, the standard costs will be established from normal levels of consumption of raw materials, supplies, labor, efficiency and capacity utilization. If the conditions vary significantly, the company will need to review its initial estimates.

5. The retailers ' method may also be applied but subject to the same condition as indicated in order to be able to apply the standard method. In this method, the cost of the stock is determined by deducting from the sale price of the item an appropriate percentage of gross margin. The quoted percentage would take into account the share of stocks that have been marked below their original selling price; it can often be advisable to use a mean percentage for each section or commercial department.

Third. Direct production costs.

The directly imputable costs, or direct costs, are those costs arising from resources whose consumption can be measured and assigned unequivocally to a particular product or to a set of manufactured or manufactured products. built by the company itself.

Fourth. Indirect production costs.

1. The indirect costs, or indirect costs, are those costs arising from resources consumed in the production, manufacture or construction of one or more products, affecting a set of activities or processes, a direct measurement of the quantity consumed per product unit is not feasible. Therefore, in order to be imputed to the product, it is necessary to use previously defined distribution criteria.

2. The distribution of indirect costs between the different products shall be liable to reasonable imputation criteria, for which account shall be taken at least of the following:

(a) The indirect costs to be assigned to the manufacturing scope of the undertaking, including, where appropriate, quality control costs, as well as those of specific administration or other, shall be identified in a specific manner. are linked to production. These indirect costs shall be charged as a higher amount of the cost of the product, with the exception of sub-activity costs.

(b) The costs of inactivity or sub-activity are those costs resulting from the total or partial non-use of any element in their normal productive capacity; these costs shall be considered as expenditure for the year and their measurement shall be determine from the costs that do not vary in the short term with the level of production, taking into account the resulting ratio between the actual activity and the normal production capacity. For these purposes, it is understood by normal production capacity that a productive team can be developed under appropriate conditions in rational economic terms.

3. The depreciation of the fixed assets involved in the production process shall not be reduced by the amount resulting from the allocation of grants obtained in their acquisition.

4. The depreciation of research expenditure which is directly related to the production process in question shall be included as indirect production costs. On the contrary, the research expenditure accounted for as expenditure for the period shall not be part of the cost of production.

5. In accordance with the principle of uniformity, the criteria for the distribution of indirect costs must be systematically pre-established and should be maintained uniformly over time as long as the assumptions that have been used are not altered. choice of a criterion. In the event of modification of the distribution criteria, the rule of record and valuation of changes in accounting criteria, errors and estimates of the General Accounting Plan shall apply.

6. The allocation and allocation of costs for the products shall be carried out until such products are completed, i.e. when they are in a position to be used for final consumption or for use by other undertakings.

Fifth. Joint production.

1. If, in a given manufacturing process, inexorably, more than one product is manufactured simultaneously, the allocation of costs which are not unequivocally imputable to a particular product will be based on criteria or indicators. possible objectives with the general approach that the costs charged to each product are the most parallel or proportional to the net realisable value of the product.

2. If in the manufacturing process additional by-products, residues, wastes, wastes or recovered materials are obtained, their assessment shall be carried out in accordance with the above number. However, where this valuation is of secondary importance, it may be assessed by the net realisable value, which shall be deducted from the cost of the product or main products.

If any of these components obtained in the joint production have a negative net realisable value, such as waste that does not have a market and must be the subject of a compulsory disposal process, the separable cost of the waste will be added to the cost of the product or main products.

3. For the purposes of this rule, they shall be considered as:

a) Subproducts: those of a secondary character or an accessory of the main manufacturing.

(b) Waste, waste or waste: those obtained inevitably and at the same time as the products or by-products, provided that they have intrinsic value and can be reused or sold.

c) Recovered materials: those that, because they have intrinsic value, enter into storage again after they have been used in the production process, and once they have been reconditioned for use.

Sixth. Mermas in productive processes.

1. They will form part of the cost of production of the product the products derived from the manufacturing process until the product is finished. As a result, the costs incurred as a result of the need to develop the production process are a component of the cost of the product.

2. The mermas of the finished products are considered to be a loss of the exercise in which they are produced and will be accounted for through the registration of the final stock.

3. The compensation obtained by claims incurred in the inventories shall not be deducted from the cost of production, accounting as revenue for the period in parallel, in general, to the recognition of the corresponding losses by deterioration.

Seventh. Marketing and post-sale expenses.

1. The marketing costs are those incurred by a company to carry out the marketing of the products and which are therefore necessary to make the sales and deliveries of the products.

2. The marketing costs shall not be part of the cost of production of the product.

3. The sales commissions shall be charged to the financial year in which the revenue produced by such sales is incurred, and shall, where appropriate, be the subject of a payment.

4. Costs after the sale of the product by sales returns, repair guarantees, revisions and other similar concepts shall not be part of the cost of production.

Eighth. General administration or company management expenses.

1. The general administrative or management costs are those incurred by a company to carry out the management, organisation or control, not being related to the production cycle.

2. General administrative or business management expenses shall not be part of the cost of production.

3. However, the specific administrative or management costs incurred by the undertaking clearly related to the construction or manufacturing process of the product shall be included in the calculation of the cost of production.

4. Storage costs, unless they are needed in the production process, will also not be qualified as a cost of the product.

Ninth. Financial expenses.

1. For the purposes of this rule, financial expenses are incurred for the use of financial resources outside the company for the development of their business. Among others, financial expenses, interest and fees accrued as a result of the use of foreign sources of financing, both specific and generic, and differences in exchange from loans in currency are considered. foreign, other than those regulated in the 10th Standard, to the extent that an adjustment to the interest rate of the transaction is considered.

When the company uses the hedge accounting technique, to identify the financial expenses to be capitalized, the impact of the hedging instrument should also be considered.

2. Financial expenditure shall be incorporated as a higher value of stocks which require a period of more than one year to be in a position to be sold, without taking into account the interruptions, and provided that they have become established. before stocks are in a position to be used for final consumption or for use by other undertakings.

Financial expenses will also be incorporated as the higher value of the ongoing fixed asset that needs a period of time exceeding one year to be in use, regardless of the interruptions, and provided that such expenditure has been incurred prior to the putting into operation of the fixed assets.

3. The accounting value of the 'fit' assets to capitalise on the financial charges shall be calculated as the average of those assets over the financial year, minorated in the amount of the specific grants, donations and legacies that would have been incurred. received for funding.

4. The incorporation of the financial expenses referred to in the preceding paragraphs shall be carried out in accordance with the following rules:

(a) First of all, it is understood that the specific sources of funding for each element are the first to be taken into account. For these purposes, specific sources of financing are those which have been unequivocally used for the financing of existing stocks or fixed assets, not being repudiated as such the mere nomination of the debt, i.e. (a) a case must be identified between the funded asset and the corresponding debt; in particular, for long-cycle manufacturing stocks, commercial debts shall be considered as specific sources of financing; corresponding to the different components of their cost of production.

The corresponding portion of the amount of financial expenses incurred by the specific sources of financing shall be counted as the highest value of the asset in production or construction that has been referred to.

If part of such financing has generated revenue, it should be understood that during its generation period these funds have not been applied to the financing of the fixed assets and, consequently, these expenses should not be subject to capitalization in the proportional share associated with the funding that has originated the said revenue.

(b) The book value of stocks in manufacturing and of the ongoing fixed assets resulting after the part financed by specific sources is deducted shall be allocated proportionally, as part of the financing, to the rest of the non-commercial non-commercial funds, excluding in any case, the specific financing of other assets.

The financial expenses incurred due to the updating of the value of the provisions, in principle, do not constitute financial expenses linked to the production of an asset, except that they should be classified as such.

(c) The financial expenses referred to in the preceding subparagraph shall be calculated on the basis of the weighted average interest rate, which shall be determined as follows:

c.1. Once the sources of foreign financing excluding commercial debts have been determined, the total of the financial costs incurred by them shall be calculated. The weighted average interest rate shall be obtained by relating the two components above and shall reflect the cost of using the foreign funding.

c.2. The magnitude obtained in the preceding paragraph shall apply to the part of the investment in stocks and the fixed assets after the part financed by specific foreign funds has been discounted, with the limit for that difference in the amount of the funds not specifically obtained for these transactions, excluding commercial debts.

The amount of the financial expenses that the institution will capitalize during the financial year shall not exceed the total financial expenses incurred during the same financial year.

5. The start date for capitalization is the date on which the entity meets, for the first time, each and every one of the following conditions:

a) Expenses that must be included in the production cost of the asset.

b) You have incurred financial expenses that are likely to capitalize.

c) The activities necessary to prepare the asset for the use to which it is intended or for sale are being carried out. These activities include the relevant technical and administrative work prior to the beginning of construction in the strict sense, such as the activities necessary to obtain the permits prior to the beginning of the construction. construction. However, the mere holding of the asset is outside these activities where it is not the object of production or development that implies a change in its condition.

6. The capitalisation of financial expenditure shall be suspended for the period in which the activities relating to the manufacture or construction of the goods remain interrupted, unless the cessation of such activities is subject to restrictions. inherent in their manufacture or construction.

7. The capitalisation of financial expenses shall cease when all the activities necessary to prepare the asset for the purpose for which it is intended or for sale have been completed. An asset will normally be prepared for the use it is intended for or for sale, when the physical construction of the asset has been completed, although administrative work or minor modifications are still to be carried out.

If this is an asset made up of separately used items, the capitalization of financial expenses at different times for each part of that asset will cease.

In particular, in the case of land and solar, the capitalization of the financial costs will not cease when these are available for construction, unless there is an interruption of the actions. necessary to prepare the asset for the intended use or for sale.

8. The inclusion of activated financial expenses should be placed in the financial outcome. In this sense, as the amounts are significant, a item will be created in the financial margin with the name "Incorporation to the financial expense asset".

9. Long-term advances to be delivered to future acquisitions are beyond the scope of this rule and therefore the financial expenses related to its financing are not capitalised.

10th. Foreign currency exchange differences.

1. By application of the principle of the purchase price, foreign exchange differences should not be considered as rectifying the cost of production of fixed assets or stocks, unless they can be classified as an adjustment. at the interest rate of the transaction. However, where differences in exchange occur in foreign currency debts intended for the specific financing of the ongoing fixed assets or of the ongoing long-cycle stock of manufacturing, the loss or loss shall be incorporated. potential gain as a higher or lower cost of the corresponding assets, provided that each and every one of the following conditions is met:

(a) That the debt-generating debt of the differences has been used unequivocally for the construction of a fixed asset or the manufacture of stocks, concrete and identified.

(b) The period of construction of the fixed assets or the manufacture of the stocks is greater than 12 months.

(c) The change in the exchange rate occurs before the fixed asset is under operating conditions or the stock is in a position to be intended for final consumption or for use by other companies.

2. The capitalised amounts shall be considered as an item more than the cost of production of the fixed assets or stocks and shall therefore be subject, where appropriate, to depreciation and impairment valuation.

11th. Methods of valuation of stocks.

1. The cost of stocks of products which are not normally interchangeable with each other, and the cost of goods and services produced for specific projects, shall be determined by means of the method of identification of their costs individual.

2. In the case of assigning value to individual goods which are part of an inventory of interchangeable goods, the average price or weighted average cost method shall be adopted in general. The FIFO method is acceptable and can be taken if the company considers it more acceptable for its management.

3. The weighted average cost method determines the cost of each unit of product from the weighted average of the cost of similar products, held at the beginning of the period, and the cost of the same items purchased or produced during the period. the period. The FIFO method assumes that the products in inventories purchased or produced before will be sold in the first place and, consequently, that the products remaining in the final stock will be the ones produced or purchased most recently.

4. In general, the application of the methods indicated shall be carried out during the financial year at the time of the corresponding entries and exits of stocks. However, the application of such methods shall be admissible every certain period of time, provided that it is necessary for the management of the undertaking itself and in such a way that the end of the last period considered coincides with the date of closure of the exercise. In any case, they should be applied in a systematic and uniform manner to the company's stock.

5. For the purposes of the stock valuation, the purchase returns shall be charged as a lower value of the stocks that are returned; in the event that it is not feasible to identify the stocks returned, they shall be charged as lower value of the stocks. stocks that correspond according to the method of sorting of entries and exits of stocks used by the company.

6. For the purposes of the stock valuation, the proceeds from sales returns shall be incorporated in the purchase price or production cost corresponding to them in accordance with the method of sorting out stocks and outflows of stocks. used.

7. The "rappels" for purchases, that is, discounts and similar ones that are based on having reached a certain volume of orders, as well as other discounts originated, among other causes, for non-compliance with the conditions of the order that are ulterior upon receipt of the invoice, they shall be charged directly as a lower value of the stocks which caused them; if a part of those stocks cannot be identified, the "rappels" and other discounts and the like shall be charged as a lower value of the stocks identified in proportion to the discount that is attributable to them; the rest of the "rappels" for purchases and other discounts and the like will be counted as a lower consumption by minoring the exercise purchases.

8. In accordance with the principle of uniformity contained in the First Part of the General Accounting Plan, once a stock valuation method has been adopted, it should be maintained uniformly over time and applied for the stock set of stocks. the undertaking which has similar characteristics or nature. However, on an exceptional basis, the method of valuation of stocks may be changed provided that there has been a change in circumstances requiring the change of criteria to achieve a better reflection of the true picture of the stock. assets, the financial situation and the results of the company, which must provide the annual accounts.

In this sense, changes in accounting criteria in the stock valuation will have to take into account the rule of record and valuation on changes in accounting criteria, errors and accounting estimates of the General Plan. of Accounting.

12th. Cost of the stock in the provision of services.

1. The criteria set out in the above rules will apply to determine the cost of the stock of the services.

2. Stocks shall include the cost of production of the services, as long as the corresponding income has not been recognised in accordance with the standard of registration and valuation on sales and service delivery of the Plan. General Accounting.

3. These costs are mainly made up of labour and other personnel costs directly involved in the provision of the service, including supervisory staff and other distributable indirect costs.

The labor force and other costs related to sales and general administration personnel will not be included in the cost of the stock. The costs of stocks for the provision of services shall also not include profit margins or non-distributable indirect costs, which are often taken into account in invoiced prices.

13th. Particular rules.

1. Construction companies:

1.1 The disbursements incurred in the acquisition of general and specific facilities, as well as the initial project or project costs, will be classified as stocks and will be accounted for in accordance with the following rules:

(a) General and specific installations: they shall be charged during the period of the work or works with which they are directly related. This imputation shall be carried out linearly in the period of duration of the work or in proportion to the relationship between costs incurred and total projected costs of work.

(b) Initial preliminary draft or project expenditure: the initial preliminary draft or project expenditure, prior to its award, shall be assessed for the actual costs incurred until the project has been or has not been known. awarded. If they are not, they shall be charged to the results of the financial year and, if so, shall be charged in accordance with point (a) above for general and specific installations.

1.2 The method of the contract fulfilled, which is regulated in the Rules of Adaptation of the General Accounting Plan to the construction companies, does not apply. Instead, in accordance with the provisions of the standard of registration and valuation of income from sales and service provision of the General Accounting Plan, where the result of a transaction involving the provision of services cannot be be reliably estimated, revenue shall be recognised, only in the amount in which the recognised expenditure is considered to be recoverable.

2. Real estate companies:

2.1 The distinction between land and solar will be made in each case according to current legislation. The purchase price shall include the costs of packaging such as closures, the movement of land, drainage and drainage works, as well as the costs of demolition of buildings where necessary in order to be able to carry out new plant works; and also the costs of inspection and lifting of plans when carried out on the basis of their purchase.

They will form part of the purchase price or cost of production of the buildings, in addition to all those facilities and elements that have a permanent character, the taxes inherent in the construction and the fees of project and management of works.

In buildings intended for own use or for leasing, the value of the land or the site, in which it has been constructed, and the value of the buildings and other buildings, must be shown separately.

In buildings accounted for in stocks, once the construction has begun, the value of the buildings and buildings on which it has been built will be included in the value of the buildings and other buildings.

2.2 In the allocation of costs to works in progress, the following rules must be taken into account:

(a) The allocation of joint costs shall be based on criteria or indicators as objective as possible and which are in line with the most common practices in this respect in the sector, provided that the assigned costs are to each element or part that is specific or individually suitable for the works, whether they are the most parallel or proportional to the market value or the value of the works.

(b) The criteria for assessment or allocation of costs shall be systematically pre-established and should be maintained uniformly over time.

2.3 The assets received for the collection of claims shall be valued for the amount by which the credit corresponding to the good received is included in the accounts, plus all the expenses incurred as a result of this transaction; or for the fair value of the goods received if this was less.

In the event that the goods received for the collection of credits, are goods sold previously by the company, the incorporation of the assets to the asset will be made by the cost of production, or, if necessary, by the purchase price, provided that the amount thus obtained in case of being sold to a third party is at least equivalent to that value.

2.4 Regarding the activation of financial expenses, the general criteria included in the Ninth Standard of this Resolution must be followed.

2.5 The costs of compensation to tenants for terminating a contract will be counted as an intangible fixed asset (acquisition costs of the new contract), if the income to be obtained in the situation achieved after the compensation would allow to recover in an induitable manner, at least, the amount of the said disbursement plus the amounts necessary for the generation of the future income.

According to the above, the application of this criterion will only occur if:

a) It is possible to quantify the foreseeable future net income to be achieved in the post-compensation situation.

(b) The operation as a whole clearly and directly demonstrates an increase in the generation of future net income in respect of which the contract under contract would be generated by an amount equal to or greater than that of the compensation.

2.6 Expenditure and revenue related to ancillary activities that may be carried out in the buildings, before or during the manufacturing or construction period, shall be recognised in the profit and loss account of the agreement with its nature, provided that they are not essential for putting the asset under operating conditions.

2.7 When the acquisition of a land is agreed upon in return for a construction to be carried out in the future, the land or part of it that is incorporated into the estate of the real estate company shall be valued at fair value, or according to the fair value of the obligation associated with the delivery of the future construction when this value is more reliable.

2.8 In relation to stocks of buildings purchased or constructed for sale in multiproperty, for the purposes of valuing final stocks, and therefore calculate the "cost of the buildings sold", the cost of the The building shall be imputed to the fixed minimum use units or shifts. When performing this imputation it will be taken into account:

a) That there are days of the year that for being reserved for repairs or maintenance cannot be configured as shift shifts.

b) That some concrete dwellings are not sold on fixed shifts of use, but are reserved to accommodate the owners or users who cannot occupy their dwelling in the shift in which they are entitled, due to breakdowns or another cause.

(c) Since the demand and the commercial value of the fixed shifts of use depends on their situation in the calendar, in application of the principle of prudence the cost imputed to the shifts of use of a dwelling apartment will be distributed in proportion to the initial sales value of each.

3. Companies in the wine sector:

3.1 Unbuilt Solares and agricultural land: the purchase price includes the costs of packaging such as closures, movement of land, drainage and drainage, as well as the demolition of buildings where necessary in order to be able to carry out works of a new plant, or to permit the agricultural holding, including in the latter case the costs incurred for access and land planning, prior to planting, provided that they are closely linked to the value of the land and do not identify as a depreciable element, in which case it shall be qualified in accordance with their nature; inspection, drawing-up and study costs shall also be included where they are carried out prior to their acquisition; in no case shall the value of the planting, the amount of which is recorded as an independent asset.

The expenses incurred during the period of time necessary to recover or repair the initial productivity of the agricultural land in which the vine is grown as a result of its use during a series of exercises Economic (inter alia, fertiliser, fertilisation, land aeration, etc.) will be accounted for in accordance with the general criteria laid down in the Resolution of 1 March 2013, by the Institute of Accounts and Audit of Accounts, for which (a) rules for the registration and valuation of tangible fixed assets and real estate investments.

3.2 Plantations and replantings: their valuation will include the purchase price or production cost of the items needed to put on agricultural operating conditions a land, owned by the company, intended for The purpose of the invention is to include, inter alia, the strains, feet, grafts, posts and wire for the vine sandwich, etc., and the elements that are intimately linked to the plantation and which are of a permanent nature. The expenses incurred prior to the first productive harvest, i.e. since the plantation is in a position to produce income on a regular basis, will be incorporated as the largest value of the plantation, including, where appropriate, the costs financial according to the provisions of the Ninth Standard.

The value of the agricultural land will not be included as the largest value of the plantation, as a separate asset.

3.3 Soleras and criaderas: are the liquids obtained from the grape or wine distillation that are definitively introduced into the boots or barrels where they generate the set of organisms ("flower" or "mother") that allow the production of wine and wine derivatives, and therefore necessary to put such assets under operating conditions. The cost of production of soleras and criaderas will be made up of the purchase price or production cost of the must, broth or distillate that was introduced into the boot or barrel loses its nature and becomes converted by natural transformation. in "flower"; for its determination, it must be justified through technical studies that permit its objectification, based on the part of the broth introduced that is never to be issued as a wine product for sale.

It will also be part of the cost of production the depreciation of the barrel or boot where the "flower" is generated, by the proportion that corresponds to it during the period of time necessary for its formation, and the others indirect costs which during the process of formation of the "flower" are imputable to their manufacture; such as the amortisation of the corresponding part of the building (cellar) where they remain until the formation of the "flower", costs of handling and addition, and so on.

In principle, it is considered that this asset is not systematically depreciated as it is regenerated by the production process itself, and will therefore not be depreciated, without prejudice to any deterioration losses that may arise. may correspond to you.

3.4 Grape and wine stocks or wine derivatives:

3.4.1 The grapes purchased from suppliers that are incorporated into the winemaking process, will be valued for the purchase price, which must be added all the necessary expenses until their incorporation into the winery.

In the case that the grapes used in the winemaking process are of their own production, they must be valued for the cost of production, including the harvest or harvest and the transport to the winery. For these purposes, the following shall be taken into account:

(a) If losses arise from the characteristics of the agricultural holding in the production of the grapes, that is to say, those which are normally produced in that production and are different from those of the Qualified as exceptional in the following point, they shall form part of the cost of production of the grapes obtained in a homogeneous unit of production. For this purpose, a homogeneous production unit is defined as a plot or set of plots in which grapes are produced with matching characteristics, either by their final use in a given wine product or because the conditions of their Culture allows to consider it as a single productive element.

(b) In the case of climatic circumstances or uncontrolable and extraordinary health conditions, they shall in any event be regarded as a loss of the financial year in which they occur, without prejudice to the foregoing for the compensation received from insurance entities in accordance with the provisions of the Sixth Standard, paragraph 3, of this Resolution.

(c) In any case for the assessment of the grapes incorporated in the wine production process, the weighted average cost shall be treated.

3.4.2 The wine valuation includes the purchase price or production cost of the grapes and other raw materials incorporated into the production process, as well as the directly imputable costs (after-loading, pressing, fermentation, neglect, mixing, raising, bottling, cleaning, etc.) plus the reasonable part of the indirect (maintenance, amortization of boots or barrels, etc.) that are imputed to the final product obtained.

In no case shall the general administrative or management costs, as well as the marketing costs of the company or those corresponding to the production capacity idle in the period, be incorporated.

3.4.3 Regarding the activation of financial expenses, the general criteria included in the Ninth Standard of this Resolution must be followed.

4. Sports federations:

4.1 Expenses incurred for the organization of sporting events:

The designation of a sports federation as the organizing entity of a sporting event entails the access to an activity of organizing an event in which it is obtained as a consideration of the box office revenues and advertising, among others. Thus, the contract constitutes for the undertaking the provision of a service, and in so far as the conditions for the recognition of revenue have not been fulfilled, it will be an ongoing project, the criteria laid down in that contract being applicable. Resolution to quantify the cost of the stock.

(a) The marketing costs (those in which an entity incurs to carry out the marketing of the products and which are therefore necessary to carry out the sales and deliveries of the products) and the costs General administration or management (those in which an entity incurs to carry out the management, organisation or control, not being related to the production cycle) shall not be part of the cost of production.

(b) Not included in the cost of production are those prior to the designation or others that have an analogous nature to establishment expenses.

(c) In stocks of products in progress which require a period of more than one year to be in a position to generate income from services, they shall be included in the cost of production, financial resources corresponding to the financing of others, specific or generic, directly attributable to the implementation of the project.

4.2 Sports animals:

1. Offspring intended for sport shall be included in inventory at the time of birth, for the purposes of their physical registration, and shall be valued for their cost of production in accordance with the general criteria set out in this Annex. Resolution.

2. At the end of each financial year, the offspring shall be valued for the best estimate of the cost incurred in their feeding and care in accordance with the general criteria set out in this Resolution, until the date on which the animals are they meet the precise conditions for sporting activities.

Fourteenth. Information to include in memory.

In the memory of the annual accounts the following information must be included:

1. The criteria for the allocation of indirect costs used and, where for exceptional and justified reasons, the criteria are to be amended, these reasons must be stated, indicating the quantitative impact they produce. such amendments to the annual accounts.

2. Where appropriate, the application of the standard cost and the method of the retailers for the valuation of stocks shall be duly justified to the extent that such valuation does not differ significantly from the valuation that is deduced from having applied the provisions of this Resolution.

3. The criteria or indicators used in the allocation of costs for joint production.

4. Capitalised financial expenses as part of the cost of production of the assets and, if used, the weighted average rate of interest as set out in paragraph 4 (c) of the ninth standard of this Resolution. In particular, the criterion followed in relation to the differences in exchange and why, where appropriate, an adjustment to the interest rate should be adequately explained.

5. The value allocation methods used to assess the stocks and the periods used in the application of those methods.

6. The influence of sales returns and purchases returns on stock valuation.

7. The influence of the "rappels" for purchases and other discounts and the like originated for non-compliance with the conditions of the order that are after the receipt of the invoice, in the stock valuation.

15th. Entry into force:

This Resolution shall apply, without retroactive effect, to the formulation of the individual and consolidated annual accounts for the financial years starting on 1 January 2015.

Madrid, April 14, 2015. -President of the Accounting and Audit Institute, Ana María Martínez-Pina García.