Resolution Of April 14, 2015, Of The Institute Of Accountancy And Audit Of Accounts, To Establish Criteria For The Determination Of The Cost Of Production.

Original Language Title: Resolución de 14 de abril de 2015, del Instituto de Contabilidad y Auditoría de Cuentas, por la que se establecen criterios para la determinación del coste de producción.

Read the untranslated law here: http://www.boe.es/buscar/doc.php?id=BOE-A-2015-4394

I the comprehensive Plan of accountancy (PGC) approved by the Royal Decree 1514 / 2007 of 16 November, collects second part the rules of registration and assessment developing accounting principles and other provisions of the first part relating to the Conceptual framework of accounting. This resolution is the regulatory development of the criteria for registration and assessment for the determination of the cost of production.

To such effect, the final provision three of Royal Decree 1514 / 2007 of 16 November, enables the Institute of accounting and auditing (ICAC) to adopt, by means of resolution, rules of mandatory that develop Plan and its complementary norms, in particular in relation to registration and valuation rules, and the rules of preparation of annual accounts.

In the same way, the first final provision of the Royal Decree 1515 / 2007 of 16 November, which approves the General Accounting Plan of small and medium-sized enterprises (PGC-SMEs) and specific accounting for micro-enterprises, provides as follows: «the regulatory developments in the General Accounting Plan that are approved pursuant to the qualifications listed in the final provisions of the Royal Decree 1514 / 2007» on 16 November, which approves the Plan of accounts, will be mandatory for companies that apply the General Accounting Plan of SMEs.

If there is some aspect differential for the small and medium-sized enterprises, these regulatory developments will be express mention of this fact.»

Finally, the third final disposition of Royal Decree 1159 / 2010, 17 September, laying down the rules for the formulation of consolidated annual accounts (NFCAC), says: 'the Institute of accountancy and audit of accounts may approve, by resolution, standards enforced that develop this text and, where appropriate, adaptations that are approved under cover of the provisions of the preceding paragraphs'.

Accordingly, it is necessary to establish a rule that clarifies the criteria that, in General, they should be taken into account to carry out this assessment, on the basis of provisions of the CMP and the resolution of 9 May 2000, of this Institute, which identifies criteria for the determination of the cost of production.

In particular, in the first part of the CMP, framework of the accounting (MCC), and in the second part, rules of registration and valuation (NRV), reference is made to the cost of production as a criterion for valuation of assets, as it unfolds below: MCC section 6 assessment criteria: «1. historical cost or cost: the historical cost or cost of an asset is their price of acquisition or production cost.»

(…)

The production cost includes the price of acquisition of raw materials and consumable materials, the directly attributable to active factors of production, and the fraction that reasonably correspond indirectly related to the asset production costs, insofar as they relate to the period of production, construction or manufacture, based on the level of the normal work of the means of production capacity utilization and are necessary for the implementation of the active operating conditions (...).»

2nd plant material and NRV: «1. initial assessment: included in tangible assets will be valued at their cost, either the purchase price or the cost of production.»

Indirect taxes levied only on tangible elements are included in the price of acquisition or production cost when non-recoverable directly from the Treasury.

It will also form part of the value of the tangible fixed assets, the initial estimate of the present value of obligations arising from the dismantling or removal and other associated to this active, such as the costs of rehabilitation of the place upon which sits, provided that these obligations will lead to registration provisions in accordance with the standard applicable to these.

In the fixed assets requiring a period of time longer than one year to be able to use, will be included in the price of acquisition or production cost financial costs that have accrued before the operating conditions of the tangible implementation have been rotated by the supplier, or corresponding to loans or other outside funding specific or generic, directly attributable to the acquisition, manufacturing, or construction (...).

1.2 production cost: the cost of production of the elements of the tangible fixed assets manufactured or constructed by the company shall be obtained by adding to the purchase price of raw materials and other consumables materials, other costs directly attributable to such property.

Also add the part that reasonably correspond indirectly attributable costs to the goods concerned to the extent that such costs corresponding to the period of manufacture or construction and are necessary for the implementation of the asset under operating conditions. In any case, shall apply the general criteria set out to determine the cost of inventories."

NRV 3rd Special rules about tangible: «in particular shall apply rules that are expressed with respect to the goods that in each case shown below: (...)»

(b) constructions. Their price of acquisition or production cost shall be composed, in addition to all those facilities and elements that have a character of permanence, inherent in construction rates and optional fees project and construction management. «It must be assessed separately the value of the land and the buildings and other structures.»

NRV 10th stock: «1. initial assessment: the goods and services included in the inventory will be valued at their cost, either the purchase price or production cost.»

Indirect taxes levied on stocks only will be included in the price of acquisition or production cost when they are not recoverable directly from the Treasury.

In inventory that need a period of time longer than one year to be able to be sold, are included in the price of acquisition or production cost, financial expenses, on the terms laid down in the regulation on the tangible (...).

1.2 production cost: the cost of production is determined by adding to the purchase price of raw materials and other consumables materials, costs directly attributable to the product. You must also be the part that reasonably correspond indirectly attributable costs to the products concerned, insofar as such costs correspond to the period of manufacture, production or construction, which incurred to locate them for sale and are based on the level of utilization of the normal working capacity of the means of production.»

Consequently, according to the criteria included in CMP, traits or characteristics that define the model to determine the cost of production are as follows: the cost is quantified based on a model of full actual costs incurred during the manufacture, processing or product construction; the distribution of indirect costs of production should be performed according to the level of utilization of the normal capacity of production of the company; and the costs of inactivity or subactivity of the company with respect to the exercise (or exercises) are not included manufacturing, development or construction.

On the other hand, in the framework of the CMP of 1990, on the occasion of certain sectoral amendments, will have been collecting specific standards in which refers to the production cost applicable to the sectors of activity that are aimed such adaptations; among others, the adaptation of the Plan General of accounting standards to construction companies, approved by order of 27 January 1993 of the Ministry of economy and finance, adaptation of the Plan General of accounting standards to sports federations, approved by order of the Ministry of economy and Finance of 2 February 1994, of adaptation of the Plan General accounting standards to the real estate companies approved by order of 28 December 1994, of the Ministry of economy and finance and of adaptation of the Plan General accounting standards to the wine sector companies, approved by order of the Ministry of economy on May 11, 2001.

The fifth transitional provision of Royal Decree 1514 / 2007 of 16 November, points out that the sectoral adaptations and other provisions of development in accounting matters in force at the date of publication of this Royal Decree, remain at all what does not object to provisions in the code of Commerce, Ley de Sociedades de Capital and own CMP. Therefore, under this provision, it can be concluded that companies that were applying sectoral adaptations of CMP of 1990, in exercises initiated from January 1, 2008, are required to follow the new CMP, without prejudice that may follow considering the criteria included in the adaptations as a proper interpretive reference in everything that does not object to the new PGC or its development provisions.
In addition, recently has been published the resolution of March 1, 2013, of the Institute of accountancy and audit of accounts, by which dictate standards of registration and valuation of plant and equipment and investment property and resolution of 28 may 2013, of the Institute of accountancy and audit of accounts, by which dictate rules of registration assessment and information to be included in the memory of intangible fixed assets. Both also affect certain aspects related to the cost of production.

On the basis of the foregoing, it follows the need to define and establish the criteria to quantify the cost of production through the development of the concerned rules of registration and evaluation of CMP and, at the same time, collect and clarify the criteria for determining the cost of production included in the different sectoral adaptations of CMP and resolutions and consultations issued by this Institute.

II the resolution is divided into fifteen rules: first. Scope of application.

The second. Cost of production.

Third. Direct costs of production.

-Fourth. Indirect costs of production.

Quinta. Joint production.

6th. Waste in the production process.

Seventh. Marketing expenditure and after the sale.

Octave. General Administration or management of company expenses.

Novena. Financial expenses.

Tenth. Exchange differences on foreign currency.

Eleventh. Methods of valuation of stocks.

Twelfth. Cost of inventories in the provision of services.

Thirteenth. Particular rules.

Fourteenth. Information to include in the report.

15th. Entry into force.

The first Norma regulates the scope of application. It is clarified that the resolution is a development of CMP, CMP-SMEs and the NFCAC to be obligatorily applied all companies, what ever their legal form, both in the formulation of the individual annual accounts and, where appropriate, in the preparation of the consolidated accounts.

From an objective point of view, is established to be applicable to the determination of the production cost of stocks, understanding as such, both the goods produced as the services provided by the company. Also it will also be applicable to the determination of the cost of production of items of fixed assets, although in this case we will have to take into account the necessary terminological changes according to the nature of the asset to build. As a result, this resolution must be understood applicable to both stocks and fixed assets, without prejudice to the explicit references in the Norma Novena stocks that need a period of time longer than a year to be in working order, for the purposes of regulating the allocation of financial expenses in the cost of production of these assets and fixed assets in progress.

If you compare the scope with the international regulation, can be seen in the standard international of accounting 2 stock adopted by the European Union (hereinafter EU-NIC 2) are excluded from its scope to agricultural and forestry, mineral products, and listed commodity intermediaries, whether they measure their inventories at fair value. In the Spanish norm does not fit to make such exclusions and, accordingly, all these products should be valued at historical cost, well because so far it was not considered appropriate to extend the fair value to biological products, either because the existing wording of article 38.bis of the code of Commerce prevents applying the criterion of the reasonable value to stocks of listed commodity brokers.

The Norma Segunda is dedicated to the definition of the cost of production, for which calculation should take into account the costs directly attributable to the product (raw and consumable materials, direct labour, etc.), as well as the part that reasonably correspond indirectly attributable costs, insofar as such costs correspond to the period of production, construction or manufacturing based on the level of utilization of the normal capacity of the means of production work and are necessary for the implementation of the asset under operating conditions.

When it comes to appreciate if the asset is in operating conditions is required view, as for any other estimation carried out by those responsible for drawing up the annual accounts. This analysis must be performed with objectivity, without that therefore fit to justify different dates in which assets, with homogeneous economic characteristics, are in operating condition, nor delay the accounting consequences that would be derived based on outstanding do, if they were irrelevant for the function or destination that will deliver the asset; This is, in relation to fixed assets, to identify when the asset is in terms of entry into operation, and with respect to stocks to appreciate if the asset is able to be transmitted to third parties.

However, since for example to assess the effective implementation in operating conditions (full or regular) of an item of fixed assets may not be quite clear in some cases, from a rational economic perspective we could boast such circumstance, unless proven otherwise, when the revenue generated in the testing period exceed the amount of the accrued expenses, including own amortization «theoretical» of the asset that is incurred from the date in it starts the income generation.

Similarly, this provision clarifies that when factors of production are acquired gratuitously, through barter, total or partial, or as a non-cash capital contribution, shall apply the criteria regulated in the resolution of March 1, 2013, of the Institute of accountancy and audit of accounts, by which dictate standards of registration and valuation of plant and equipment and investment property.

At this point, maybe should clarify what is the scope of the criteria contained in the NRV 14th 1 when says that revenues in the exchange of goods or services of the same nature and value will not be recognized.

The exchange of goods or services to the traffic do not differ in substance of the swaps in which an item of fixed assets is acquired. They are operations in which means of payment the customer delivers a non-monetary asset. Moreover, if the purchased item is a fixed asset and the delivered product that sells or develops the company in the register of the operation concurrirían two standards, those provided for the acquisition of a fixed asset by way of Exchange and for the delivery of the product of the company in Exchange for a fixed asset.

In this case, it seems reasonable to presume that the swap should qualify as commercial from the perspective of purchasing business (incorporation of fixed assets to the patrimony of the company), and the delivery of the product to carry entail recognition of income as net amount of turnover.

In regard to the valuation of fixed assets and income, based on the premise that non-monetary transactions, as well as the monetary, should be in terms of economic equivalence, it could be concluded that choosing one or another reasonable value, received or delivered, ultimately it will come conditioned by which better meets the requirement of reliability that must comply with the annual accounts.

When dealing with credit default swaps of stocks, services in exchange of stock, or services for services, the debated issue was the valuation of these exchanges and also could impose any limit to the revenue recognition pursuant to the NRV 14th. However, the majority opinion was the consider this rule as a caution to the recognition of income as net amount of turnover in the transaction when not appreciated an economic exchange with commercial substance, that is, product delivery to the customer.

In application of this criterion, and in line with previous interpretations of this Institute, the swaps of homogeneous elements (for example, credit default swaps fungible commodities between two companies or credit default swaps of finished products, or interchangeable goods between two marketers), would not fit reputar strictly as transactions that lead to the recognition of income (such as net amount of turnover) , but rather as a mere cooperation between two companies in order to be more effective in their commercial work or end last, consisting of the delivery of the product to their respective customers. In such a case, the valuation of the item received shall apply the criteria laid down for the non-commercial CDs.

On the other hand, when the company outsource either partially or fully its production process, without losing the control of stocks or products in progress (for example, in the so-called maquila operations), nor be recognize revenue by transfer, or subsequent delivery charges, but the service received by the company which performs the transformation. If in addition the latter retains part of the production in Exchange for the service provided, the conclusion does not vary. In this case, the service received an advantage by applying the criteria laid down for trade swaps.
The Norma Segunda also specifies that the standard cost can be used by the company to determine the cost of the products provided that the result of applying it does not differ from the true cost of production, taking into account the principle of relative importance established in the MCC.

For this purpose 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 should review their initial estimates.

Another novelty of this standard is the incorporation of the method of retailers. Both the 2 EU-NIC and the AECA document on the subject (document No. 8 «stock», elaborated by the Committee on principles and accounting standards of AECA), expressed that the method of retailers could be recommended to use in the commercial sector to the retail, for the valuation of inventories, when there are a large number of articles which rotate very often that have similar margins and for which it is impractical to use other methods of calculating costs.

Be that as it may, it would be desirable to notice that this method is not strictly a way to estimate the cost of production, but rather a procedure for estimating the book value of the goods at the end of the year. Therefore once the quoted value the company must post, in his case, corresponding loss impairment if the recoverable amount of the stocks is lower than their value in books.

Third and fourth moves on to define the concepts of direct and indirect costs; the difference between the two lies in the direct costs are the consumptions of inherent factors or that they are to be assigned, whereas the principle of materiality, a product, or several specific products because it is clear the relationship between the element of cost and the product or products that is incorporated, while in indirect costs this relationship is not clear by what criteria of distribution are needed to your allocation to the product. In any case, it is necessary to distinguish between costs direct and proportionate because there can be direct costs progressive or regressive, depending on the level of production to be carried out.

In addition, in order to clarify possible doubts, it seems advisable to refer to certain issues that present particularities regarding the allocation of the costs, for example: to) charges, valuation corrections impairment of assets used in the manufacture of the product, shall not be taken into consideration for the purpose of determining the cost of production.

(b) it is also necessary to consider the assets used in the manufacture of the product which has been financed through a grant; in this case, the allocated costs of that element is not minorarán in the amount attributable to the grant, thus safeguarding the fact that, in General, the way to finance a good does not affect their price of acquisition or production costs without prejudice to the criterion on activation of financial expenses.

(c) Finally, with regard to these aspects, the cost of dismantling, removal or restoration of items of 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 show throughout its useful life.

Paragraph 2 of the Norma Cuarta develops the rational criteria to be applied for the allocation of indirect costs, regulating the minimum aspects that guarantee the rational application of the distribution of indirect costs, taking into consideration the following: to) you should differentiate the various fields that make up the activity of the company and which happen to the previous procurement i.e., manufacturing, management, marketing, etc.

(b) will be attributable indirect costs corresponding to the field of production, construction or manufacturing. In this regard, it is convenient to clarify that administration costs, to the extent that are specific to a particular manufacturing process must be assigned to the production cost, without prejudice to General costs of administration or management, which, in no event will form part of the cost of production, as established the Norma Octava of the present resolution.

(c) in relation to the differentiation of costs, widespread by the doctrine, between fixed costs - those who remain unchanged with volume of production - and variable costs - which are correlated with the volume of production, should be noted that the possible diversity in terms of the conceptualization of a few and others due to the degree of variability of the costs should be considered with regard to a certain level of productive activity and for a period of time specifically, along with the existence of mixed costs (semi-variable or semi-fixed and staggered), has determined that he has dispensed with this differentiation in the present resolution, except as regards the costs of inactivity or subactivity.

(d) with regard to subactivity costs it must be emphasized that they do not form part of the cost of production, in compliance with provisions in the PGC establishes requirement to assign indirect costs them based on the level of utilization of the normal capacity of the means of production work. The subactivity measurement requires a prior approach to costs incurred a company above used productive capacity; that is, the subactivity will pick up those costs incurred by a company by the under-utilisation of productive capacity planned as normal, so it should be charged to the profit for the period. And all this without prejudice to that, in the case that the subactivity should be extended in time, such circumstances must be taken into account for the purpose of making, where appropriate, appropriate valuation corrections of the affected assets.

The standard defines costs subactivity from fixed indirect costs, i.e., those that do not vary in the short term with the level of production, establishing that to them be must apply the ratio between real activity and normal production capacity, understood as that which would be in adequate conditions in rational economic terms; theoretical definition which will require the corresponding value judgments by managers of the company, which is a reference appropriate production expected to achieve under normal circumstances, considering the average of several periods or seasons, and taking into account the loss of ability resulting from planned maintenance operations.

Regarding situations that occur above normal production capacity in any case apply higher fixed indirect costs of the effectively incurred in a way that is never valued the assets produced above the cost, since the standard refers only to the costs of subactivity, i.e. to cases in which the production is less than the normal capacity of the means of production.

As a novelty worth referring that in paragraph four of the Norma Cuarta embodies, in certain circumstances, the treatment of costs of research as product costs. In principle, research costs are not costs incurred in the development, manufacturing, or construction of the active phase and therefore, in a literal interpretation of the CMP not should form part of the cost of production.

However, in an interpretation «wide» of the concept of product cost perhaps could argue that the amortization of the costs of research is an indirect costs of production to the extent that have a direct relationship with the production process. Instead research and development expenses accounted for as expenses of the period would not form part of the cost of production.

According to this criterion, without prejudice to that research costs relate to higher costs of future production than with the present, it is not less true that its rating as the cost of the product is consistent with a "comprehensive approach" the concept of cost of production as the "product cycle" cost. For this purpose, i.e. to appreciate this idea of economic projection future, resolution is conditioned qualifying as product cost to research costs have been previously activated and subject to depreciation.

Finally, it is important to bear in mind that production costs must be charged to the product until this is finished, that is, until you are able to be allocated to final consumption or use by other companies.
The joint standard fifth production sets out criteria for the allocation of joint costs to two or more products obtained at the same time in the production process. This indicates that the distribution of these joint costs occurs, in the majority of cases, with the orientation that are more parallel or proportional to net realisable value. In this sense, it is necessary to point out that when for reasons of management carry out a common production, to the extent that this is a decision of the company, the production cost must be quantified in accordance with the general criteria.

This standard also will provide for cases in which the production process are obtained additional by-products, waste, waste, waste or recoverable materials, defining them and adjusting their valuation. As novelty with respect to the previous resolution of the year 2000, added the case where waste have negative net realisable value, settling residue separable cost will it add to the cost of the main product.

Losses, i.e., irreversible losses arising from the nature of the productive activity in the broad sense (since he joined the company until his departure), are collected in la Norma Sexta, assuming as a rational criterion for accounting consideration, when they occur, forming part of the cost of producing those caused during the manufacturing process While, on the other hand, losses that occur in the finished products do not form part of the cost of production of the product and will be reflected as a loss for the period in which they take place. In the event that exceptional losses occur, these will be recorded in the account of profit and loss in accordance with the nature.

In the Norma Séptima regulates the treatment of marketing costs and costs after the sale of the product, indicating they are not part of the cost of production to the extent that it is costs that do not correspond to the period of manufacture.

Moreover, the Norma Octava is dedicated to General costs of administration or direction by establishing, as a general rule, which does not form part of the production cost, without prejudice to indicated for the specific costs of administration in the field of manufacturing.

A_la_hora_de prosecute the practical application of this criterion, we have analyzed different scenarios: to) first of all, those companies whose exclusive purpose is the construction of an asset. In such a case, administration costs incurred in the period of construction is most are part of the cost of the asset to the extent that the main activity of the company is the construction of the well and, therefore, the specific activity of production centralizes the consumption of most of the resources allocated to administration costs. However, it cannot conclude that all administration costs incurred by the company in that period should be incorporated to the value of the asset as a higher cost.

(b) Secondly, the assumption that the company is building an asset for subsequent exploitation, which should apply the same criteria during the construction phase.

(c) Thirdly, the case in which a company in a given time or time interval observing an increase in capacity (for example, internal growth of its dimension or modification of its facilities, territorial expansion of its offices or commercial places), and, at the same time, there is why additional administration costs for that reason that, following similar reasoning to the exposed to the two previous scenarios they could meet the definition of cost of the asset under construction. Another thing would be how to find or identify a segregation mechanism suitable in order to isolate the components that would integrate administrative expenses; that is, which should post the result of the period and costs to recognize as greater cost of the asset.

(d) Finally, the most common course in practice that would be related to the cost of production of inventories, for the purposes of concluding part of general administration costs, if any, could be described as specific. Well, without denying that outlays made by such a concept partially increase the added value of the product, in this case, the most appropriate perhaps count these costs on account of losses and gains by the difficulty of identifying what specific amount should be recognized as cost and another as an expense of the period, as well as by the limited impact this would have on the assumption that the volume of production and sale of the company He is kept constant.

The Norma Novena of this resolution the incorporation of financial costs as higher value of fixed assets develops course and long course cycle stocks, i.e. those stocks whose manufacturing process is more than a year, without taking into account interruptions, developing the treatment provided in CMP and in line with the methodology referred to in the EU-IAS 23 costs interest.

The qualification of the factor capital-tiempo as the cost of production, i.e. the qualification as the cost of the product of the remuneration of the capital employed in the production process, has been a question widely debated by the doctrine, there are arguments for and against that qualification.

Thus, some argue that it is evident that the use of the capital-tiempo represents a cost factor that, irrespective of the legal nature of the source of funding should be integrated in the production as an ingredient cost more than this. In this sense, although the magnitude of the production cost of the asset under construction or preparation was greater than the amount of the sources of foreign financing of the company, say that the portion of the assets financed with own capital also would justify the accrual of a component of the cost of production, only that do not involve an explicit accrual of interest to pay lenders should be recognised as an implicit admission of financial capital by the company. This income could be accounted as a reduction of the interest earned on funding of others attributable to the profit and loss account. In any case, after considering the capital-tiempo factor, the cost of the asset could not be greater than its recoverable amount.

Conversely, others argue that the way to finance construction, manufacture or production of an asset should not affect the cost of production. Firstly, because equity does not mean an explicit cost (expense) and therefore not might qualify it as a factor in the real cost, and ultimately because those who defend this thesis believe that the cost of foreign funding is a cost or compensation of the debt more than a factor of the production cost of the asset. Follow this approach, avoiding that the book value of the product in construction, manufacturing, or processing is configured as a dependent and proportional to the level of indebtedness of the company to greater indebtedness increased asset value, and one would lead to greater comparability of financial information.

In view of these arguments, the Spanish standard adopts an intermediate position and in this sense the CMP approved in 2007 has that assets requiring a significant period of time (more than one year) in order to be able to fulfill the function that is to own, financial expenses are included in the price of acquisition or production cost (this is (, express or real and not implied compensation of capital employed) that have earned up to that date (entry in operation for non-current assets or able to be disposed for stocks) and that have been rotated by the supplier or corresponding to loans or other financing others, specific or generic, directly attributable to the acquisition, manufacture or construction.

Development of CMP, in the Norma Novena regulates the following aspects: to) identify which financial expenses such as those arising from the use of non-enterprise, both specific and generic, financial resources for the development of its activity.

(b) clarifies that the assets 'fit' to capitalize accrued financial expenses are stocks of fixed assets in construction and long cycle when operating conditions commissioning period exceeds the year, in both cases, accounted for the amount of subsidies, donations or bequests received for funding. That is, unlike the specific financing with equity, that the cost of the asset, in the case of receiving a grant to finance the acquisition of an asset, the subsidy it not minora will be first specific funding to consider, if well at zero cost. If the grant, in turn, cause of a subsidized loan brings the financial expenditure of the loan will be the incremental or market interest rate.
(c) revising the criteria established in the past to identify which financial expenses, with regard to the processing of own funds. Modification is due to the pursuit of the highest level of convergence with the NIC-EU in all those accounting treatments deemed appropriate from the perspective of the objective of true and fair view. At this point it is necessary to warn the way consider funding affects the construction or manufacture of the asset, that is, the priority in identifying the sources that finance the asset, has traditionally been a mere accounting Convention influenced in his approach to a greater or lesser extent by the general approach that has presided over the debate on the factor capital time as the cost of the product.

Therefore, as indicated, change which is now introduced in the methodology simply obeys in search of greater harmonization with the Convention itself, included in the international standard of reference.

(d) activation of financial expenditure on land, examines the doctrine of this Institute on the concept of "necessary actions".

(e) shall suspend the capitalization of financial expenses during outages that occur in the process of manufacture or construction, the terms stated in the standard. However, unlike the criteria maintained to date, has been considered opportune to review the treatment of activation of financial expenditures on the grounds and solar equating the term of activation than anticipated for the construction of the building, on the grounds that it will be at that moment, at the end of construction, when the asset, as a whole, in terms of earning power.

Without prejudice to the foregoing, and as set forth in the letter d), in any case it is necessary to warn that the rule to enable financial expenses should not be interpreted as an automatic process of accumulation of costs in the value of the asset under construction, but as the logical process of incorporating the cost of a factor of production, the capital-tiempo, depending on the circumstances that under normal conditions would be required to allow the transformation of the asset that is, those that might be in adequate conditions in economically rational.

(f) finally collected in solving interpretations of this Institute on other aspects related to this matter, as for example, the criterion will continue to show in the profit and loss account activation of financial expenses and treatment proceeds when outside sources of funding have been temporarily reversed and, consequently, income-generating.

Regarding this issue, in line with provisions of the international standard of reference, is necessary to clarify the criteria published by this Institute when some of the proceeds to finance the construction of an asset are temporarily placed in restricted accounts (that generate a return) waiting to apply the funds to the investment. As well, in this case, is considered that produced net cost (expenses less interest income) is the indicator of the amortized cost of debt since deposits are always linked to cover future payments of investment.

(g) the activation of financial costs in the construction, manufacturing or processing assets, from the perspective of the consolidated annual accounts, may occur, among others, the following particularities.

The treatment of financial expenses incorporated as greater cost of inventories of a building society caused by the perceived funding from its parent company, when these stocks have not performed against third parties outside the group, staying in the building society, implies that given the financial expenditure is incorporated into individual accounts as a higher value of an asset (property stocks) in the consolidated annual accounts to be removed, the result produced in the transaction (in this case by the amount of accrued interest income). Simultaneously the carrying amount of inventories by that amount, shall be corrected until this result against third parties (in General, when stocks are paid to third parties) or one of the participating companies in operation ceases to be part of the group, provided the asset that incorporates the result do not remain within the same.

On the other hand, it is usual that some groups use centralized systems to manage their cash flow (cash pooling» contract). If the Treasury of all the companies that compose it, through the granting of credits and debits reciprocal is centralized in a company of the group under these agreements between subsidiaries and the matrix (if the latter acts as "centralizing") or a company or branch created ad hoc for this purpose, the accounting consequences of these structures, in individual and consolidated annual accounts would be the following ((: i) in the individual annual accounts, the transfer of resources and, where appropriate, provision of services between the companies of the group in any case should be paid in terms of fair value, and ii) in the consolidated accounts loans, debts, income and reciprocal financial expenses should be deleted.

Finally, when the carrying amount of an asset under construction exceeds the amount of the specific funding, average generic funding may differ in the individual and consolidated annual accounts. If the difference is significant, would fit two possible solutions depending on the background and circumstances of the case: i) consider that funding generic company which maintains the asset on its balance sheet, from the perspective of the group, should qualify as specific financing and, therefore not change calculations made at the individual level, or, ii) Alternatively, required to recalculate the weighted average effective rate financing generic group as an entity that reports and enter the corresponding setting. Unless better evidence otherwise, be considered the first of the proposed solutions to allow in the majority of cases the goal of true and fair view.

In order to collect these criteria, the first standard, paragraph 2 of the RICAC has indicated that the resolution is mandatory: "... both in the formulation of the individual annual accounts and in the preparation of the consolidated accounts.» In such a case, the criteria contained in the present resolution shall apply taking into account the situation of the Group of companies such as accounting subject or entity that reports'.

(h) in accordance with the fifteenth resolution standard, companies that were activating financial burden will continue to the new criteria for financial expenses accrued from January 1, 2015, unless so it fits an application to the letter of the criteria on the matter declared in force to date (for not objecting to those included in CMP) , and which are now approved to replace those.

Norma Décima is the exchange differences on foreign currency. Unlike its predecessor, 2007 CMP makes no express regulation on the accounting treatment of the exchange differences from the perspective of the production cost. Therefore, in principle, seems that only could be as such, cost of the asset to the extent that may qualify as an adjustment to the interest rate of funding, in line with the provisions of the international standard reference. However, it is not less true that the existing 2007 CMP nor prohibits expressly regulated in the 1990 CMP treatment on this matter.

When the company into debt in a foreign currency funding cost has two components: expenditure by interests (that is, the equivalent in functional currency of financial expenses accrued pursuant to the cost repaid foreign currency liabilities) and the exchange differences associated with the cancellation of debt (including debt interest). In addition, at the end of the exercise, will emerge a new difference of change, in accounting for liabilities in foreign currency that looks on the balance sheet of the company at year-end Exchange rate.

When analyzing if both components (or what part each) must be qualified as financial expenses, for the purposes of capitalizing on such financial burden as higher value of an asset under construction or manufacturing, several approaches have been discussed.

First, consider that all costs accrued during the financial year, in respect of interest and exchange differences, constitute an adjustment to the interest rate and are therefore susceptible to capitalize as the cost of production. Advocates of this approach, majority also say that if the exchange differences were positive and for an amount exceeding the financial expenditure, excess is recognised as an adjustment to the cost of the asset.

The second solution under discussion was limit activated financial expenditure in foreign currencies (in respect of interest and exchange differences) spending by interests that would have incurred if the company had opted for borrowing in functional currency.
Finally also we could hold that when the company opts for borrowing in foreign currency the financial cost of the operation has two components that cannot be dissociated, strictly financial expenditure and the difference of change. To reflect the true picture of the operation, in theory, the effective interest rate should be calculated in functional currency from the spot exchange rate existing at each closing. As well, this type of effective theoretical interest for each exercise could be taken as the limit for the purposes of considering the difference of change likely to qualify as an adjustment to the interest rate of the operation.

After weighing the arguments for and against each alternative, the RICAC was included in a joint solution based on the specific or generic nature of debt in foreign currency. So when the company acquires (build or fabricate) an asset in a foreign currency, the addition to the balance should be to its equivalent in functional currency and spot exchange rate. In this case, it may be usual company to finance assets in foreign currency with the purpose of asset exchange rate risk associated with the risk of exchange rate of specific funding.

In this case, is considered that the solution that better reflect the true picture would be linking the cost of the asset, up to the date of entry into operation, with the risk of exchange rate of debt, so that from the point of view of the issue debated, in essence, would qualify the difference of change not so much as an adjustment to the interest rate on the debt but rather as an adjustment to the purchase price of the active, and therefore follow the existing solution in CMP of 1990 with clarifications. Thus has it been collected, autonomously, in the tenth standard of resolution without implying a change in the financial nature of the difference of change for what this cost factor would be too you apply the same limitations provided for in the Norma Novenas for the financial expenses (home, interrupt and termination).

On the contrary, if operation is not appreciated that economic links between assets and financing, in order to preserve the difference between the cost of the asset and the cost of debt, has considered that the most appropriate is described the change as an adjustment difference related strictly to the interest rate of the operation, and take as the limit of the difference of change to capitalize on the cost that is incurred if the company had decided to finance in functional currency.

In the eleventh Norma, dedicated to costing methods, are more entity changes because two valuation methods are only supported in CMP in force: the average cost weighted, as priority method, and the FIFO. In addition the content of section 1.3 is developed. Methods for value assignment of the NRV 10th stocks of CMP in the following terms: to) in accordance with the international standard of reference defines the methods of allocation of value and weighted average cost, FIFO, without prejudice to the mandatory application of the principle of uniformity. In this regard, it is necessary to clarify that the different geographic location or tax differences will not be sufficient to justify the application of different methods of allocation of value.

b) focuses the temporary time of application of the methods of management of entries and exits of stocks.

c) recalls that returns of purchases shall be charged as lower value stocks callback object.

(d) the incorporation into the inventory of the company's sales returns from stocks, will take place for the price of acquisition or production cost corresponding to such stock, in accordance with the method of management of entries and exits of stock used. However, where the net realisable value is lower than the price of acquisition or production cost, clarifies that it will be necessary to apply the General rules on impairment of assets.

(e) «rappels» shopping or volume discounts and other discounts and the like caused by breach of the conditions of the order that are subsequent to the receipt of the invoice, shall be charged directly as the lower value of stocks to which they relate. In the event that some of these stocks have been alienated or given low, the «rappels» shall be recognised in the profit and loss account as lower consumption of stocks. Ultimately, only to the extent that these «rappels» and discounts can be reasonably charged to a set defined in shopping, known to the end of the year, are considered to be less value in proportion to the granted discount and those stocks that were attributable.

Of agreement with stated, the «rappels» shopping or volume discounts and other discounts and similar resulting from breach of the conditions of the request that are subsequent to the receipt of the invoice, to the end of the year, are counted: e.1. As a lower value of those stocks that were attributable and in proportion to the granted discount, or e.2. If stocks have been alienated or given lower, as lower consumption of stocks.

When "abseiling" is received in the following year will apply this same criterion and the impact resulting from the discount received will be posted using the general criteria relating to events after the end of the year.

(f) in any case, the criterion used for the valuation of stocks will be maintained evenly in time and must be applied systematically to all the stocks of the company, in accordance with the principle of uniformity; in the event of a change in accounting criteria it will be as provided in the standard for recording and valuation of changes in accounting principles, errors and accounting estimates of the chart of accounts.

The twelfth Norma clarifies the criteria for calculating the cost of inventories in the provision of services. According to the General Accounting Plan, stocks are assets held to be sold in the normal course of exploitation, under 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 rendering of services.

In view of this definition, on the concrete scope of services stocks, it is worth making the following observations.

The chart of accounts, in the standard registration and assessment of stock sets: «1.4 cost of inventories in the provision of services: the criteria set out in the preceding paragraphs will be applicable to determine the cost of inventories of services.» In particular, stocks shall include the cost of production of the services as long as even the income has not been recognized by appropriate provision of services pursuant to the rule relating to sales revenue and services.'

For its part, the standard on recognition and measurement of income by providing services has as a general rule that, when the outcome of the transaction involving the provision of services cannot be estimated reliably, revenue whereas the percentage of completion of the service on the date of closing of the exercise will be recognized. When this estimate is not possible, revenues from provision of services only are counted in the amounts that are considered recoverable expenditure recognised.

In the thirteenth Norma have been collected and shading, on the basis of its compatibility with the PGC, various criteria issued by the Institute through consultations and several special precepts on the cost of production, including the sectoral adaptations adopted before January 1, 2008.

Thus, for example, with regard to the costs for the award of contracts in the construction companies this Institute considered to activate the expenses referred to in the thirteenth Norma paragraph 1.1. b) would require that the following requirements are fulfilled: to) can only be described as active technical nature expenditures directly related to the contract in question and incremental nature. That is, expenses that were incurred on the occasion of the corresponding tender and not those related to General administrative functions of the company.

(b) disbursements made to qualify as active should be identifiable separately and measurable with reliability.

(c) in addition, it must be likely that contract will be obtained.

In relation to the construction companies is also recalled that within the framework of the new PGC is no longer application called «fulfilled contract method», as he was established in 2 of the BOICAC consultation no. 78. In the sectoral adaptation applicable to these companies, and the object of accounting effects arising from the application of that method, a series of accounts classified in subgroup 34, called 'works in progress', are disaggregated where you are reflected the cost of «units of work that are in training or partial execution to the end of the year and that has not been computed as sales or turnover».
Therefore to this method have been abolished, the impact of the works on partial execution which has not been recognized as sales, is not a discussion of the production cost of stocks, but the rules on recognition of income in accordance with the stage of completion. In application of such method does not reflect the possible differences between the degree of execution of the works and the recognition of revenue, stock accounts, but accounts of clients or creditors, in particular in the accounts «Clients work executed pending certification» (434) or "Customers work certified in advance" (439).

Accordingly, we could say that in the context of the criteria for the recognition of income for construction contracts, stocks adhere to certain headings as materials or prepaid expenses of work that consumed as expenditure to the services we provide, but in any case englobarían concepts covering the "completed contract method".

Norma 14th on the information has been included to be included in the notes on the accounts. In the previous resolution disclosure requirements were scattered by different standards to be included in the memory, opting in the present by collecting those requirements in a specific standard. Added also new requirements in line with international accounting standards, as referred to the capitalized financial expenses and the weighted average interest rate.

The resolution of the production cost of the year 2000 included a rule relating to the inventory value adjustments. In this resolution is has overlooked this issue because they are already collected in the resolution of 18 September 2013, the Institute of accountancy and audit of accounts, by which dictate standards of registration and valuation and information to be included in the memory of the annual accounts on the deterioration of the value of the assets.

Finally, we have included a Norma fifteenth on the entry into force of the resolution, protected by its nature of rule of law with the ability to modify the legal regime in force, clarify that it regulated criteria that modify expressly approved by resolution of the year 2000 shall apply evenly and without retroactive effects to the exercises initiated after 1 January 2015. Therefore there is no application to the Charter by the companies of the criteria stated in force to date, for not opposing the CMP, and criteria which are now approved in lieu of the above.

All this without prejudice to that criteria now being published can be taken before that time as an adequate benchmark to calculate the cost of production, to the extent not involving a change respect to accounting treatment regulated in a way expressed to date.

For all of the above, as a result of the need to develop standards of registration and evaluation of CMP concerning the determination of the cost of production, and the standard for the formulation of the consolidated annual accounts, this Institute of accountancy and audit of accounts, according to the final provision three of Royal Decree 1514 / 2007 of 16 November , and the third final provision of the Royal Decree 1159 / 2010, September 17, dictates the following resolution: index first. Scope of application.

The second. Cost of production.

Third. Direct costs of production.

-Fourth. Indirect costs of production.

Quinta. Joint production.

6th. Waste in the production process.

Seventh. Marketing expenditure and after the sale.

Octave. General Administration or management of company expenses.

Novena. Financial expenses.

Tenth. Exchange differences on foreign currency.

Eleventh. Methods of valuation of stocks.

Twelfth. Cost of inventories in the provision of services.

Thirteenth. Special 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.

CRITERIA for determining the cost of first production. Scope of application.

1. this resolution develops criteria for the determination of the cost of production, regulated in the General Accounting Plan, the General Accounting Plan of small and medium-sized enterprises and the rules for the formulation of the consolidated annual accounts.

2. Accordingly, without prejudice as indicated in the following paragraph, this resolution is mandatory for all companies, any application that is its legal form, which must apply these standards, both in the formulation of the individual annual accounts and in the preparation of the consolidated accounts. In this case, the criteria contained in the present resolution shall apply taking into account the situation of the Group of companies such as accounting subject or entity that advises.

3. the present resolution shall apply, in General, for the determination of the cost of products - goods and services - fall in stocks, which were or are manufactured or produced by the institution.

4. also applies, with the necessary terminological changes, for the determination of the cost of fixed assets, intangible, or material manufactured or constructed by the entity, in whole or in part.

The second. Cost of production.

1. the cost of production consists of the purchase price of raw materials and consumable materials, as well as the rest of the goods or services consumed and directly attributable to the asset. You must also be the part that reasonably correspond indirectly attributable to the asset cost, insofar as such costs correspond to the period of production, construction or manufacture, based on the level of utilization of the normal capacity of the means of production work and are necessary for the implementation of the asset under operating conditions, i.e. so that they can comply with the function that it is you own or according to their accounting classification.

2. where the factors of production are acquired gratuitously, through barter, total or partial, or as a non-cash capital contribution, shall apply the criteria regulated in the resolution of March 1, 2013, of the Institute of accountancy and audit of accounts, by which dictate standards of registration and valuation of plant and equipment and investment property.

3 in any case, will be part of the production cost of fixed assets: to) expenses incurred on the occasion of the tests or tests that are carried out to ensure that the asset is in running condition and can participate fully in the production process. These expenses are minorarán in income generated by the asset during that period. When revenues exceed expenditures, the excess will reduced the production cost of the asset.

On the other hand, expenses and incomes related to ancillary activities that could be done with fixed assets, before or during the period of manufacture or construction, will be recognized on account of profit and loss in accordance with their nature provided that they are not essential to put assets in operating condition.

(b) dismantling or removal costs and the costs of rehabilitation in the terms provided in the resolution of March 1, 2013, of the Institute of accountancy and audit of accounts, by which dictate standards of registration and valuation of plant and equipment and investment property.

4. without prejudice to the foregoing, the standard cost will be used by the company to determine the cost of the products provided that the result of applying it does not differ from the cost of production defined in paragraph 1 of this standard, taking into account the principle of materiality.

For this purpose 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 should review their initial estimates.

5. the method of retailers may also apply but subject to the same condition that has been suggested for the implementation of the standard method. In this method, the cost of inventories is determined by deducting an appropriate gross margin percentage on the item sold price. The cited percentage would take into account the part of stocks that have been marked below their original sale price; often it may be advisable to use a percentage for each section or Department.

Third. Direct costs of production.

The directly attributable costs, or direct costs are those costs that are derived from resources whose consumption can be measured and assign unambiguously to a specific product or a set of products manufactured or constructed by the company.

-Fourth. Indirect costs of production.

1. indirectly attributable costs, or indirect costs are those costs that are derived from resources that are consumed in the production, manufacture or construction of one or more products, affecting a set of activities or processes, so a direct measurement of the amount consumed per unit of product is not viable. Thus, for their allocation to the product, it is necessary to use previously defined distribution criteria.
2 the distribution of costs between the different products will respond to reasonable allocation criteria, which will be taken into account, at least, the following: to) identify specifically the indirect costs that are to be assigned to the field of manufacture of company, including, where appropriate, the quality control, as well as administration specific or others who are linked to the production. These indirect costs, shall be charged as a greater amount of the cost of the product, except for the costs of subactivity.

(b) inactivity or subactivity costs are those costs result of not using full or partial of some element in their normal productive capacity; These costs are considered as expense in the period and its measurement is determined from the costs that do not vary in the short term with the level of production, bearing in mind the resulting ratio between real activity and normal production capacity. For these purposes, it means normal capacity of production that can develop a productive team in adequate conditions in economically rational.

3. the depreciation of plant and equipment involved in the production process will not be reduced in the amount resulting from the allocation of subsidies obtained in its acquisition.

4. will be included as indirect production costs amortization of research expenses that are directly related to the production process in question. On the contrary, research expenses accounted for as expenses of the period will not form part of the cost of production.

5. in accordance with the principle of uniformity, the criteria for distribution of indirect costs are to be systematically preset and must be kept evenly over time as not to alter the assumptions that led to the election of a criterion. In case of modification of the distribution criteria shall apply the standard of recording and valuation of changes in accounting principles, errors and estimates of the chart of accounts.

6. the assignment and allocation of costs to the products will be held until such products are finished, i.e. when they are able to be intended for final consumption or use by other companies.

Quinta. Joint production.

1. If simultaneously more than one product is manufactured in a process of fabrication, of inexorable form, the allocation of costs which are not clearly attributable to a particular product will be based on indicators or criteria more objective possible with guidance, in General, that the costs charged to each product are the most parallel or proportional to the net realisable value of the aforementioned product.

2. If in the manufacturing process byproducts, waste, waste, waste or recovered materials are obtained in addition, your assessment will take place as indicated in the previous issue. However, when this assessment is of secondary importance, may value by the net realisable value, the amount that will be deducted from the cost of the product, or main products.

If any of these components in the joint production had a negative net realisable value, as it can be the case of waste which have no market and should be subject to a compulsory process of elimination, detachable residue cost will be added to the cost of product or main products.

3 a purpose of this rule, shall be regarded as of: to) by-products: those of secondary or accessory character of the main manufacturing.

(b) waste, waste or rubbish: the inevitably obtained and at the same time that products or by-products, which always have intrinsic value and can be reused or sold.

(c) recovered materials: who, by having intrinsic value, come again in store after having been used in the production process, and once you have been reconditioned for use.

6th. Waste in the production process.

1 shall form part of the cost of production of the product losses derived from the manufacturing process until the product is completed. Consequently, the expenses incurred by wastage inherent or necessary to develop the production process constitute a component of the cost of the product.

2. losses of finished products are considered a loss for the period in which are produced and collected accounted for through the registration of ending stocks.

3 compensation obtained for claims that occurred in the inventories they shall not be deducted from the cost of production, counting as income of the period in a manner parallel, in General, the recognition of the corresponding impairment loss.

Seventh. Marketing expenditure and after the sale.

1. marketing costs are those in which incurs a company to carry out the commercialization of products and which are, therefore, necessary to carry out the sales and deliveries of products.

2. the expenses of marketing will not form part of the cost of production of the product.

3. the sales commissions shall be charged to exercise that accrued revenues produced by these sales, so it will be, in your case, subject to accrual.

4. costs after the sale of the product by sales, service, reviews and other similar concepts guarantees refunds, will not form part of the cost of production.

Octave. General Administration or management of company expenses.

1. the expenses General Administration or address are those incurred by a company to carry out the management, organization and control, being not related to the production cycle.

2. General costs of administration or company address will not form part of the cost of production.

3. However, the specific costs of administration or address incurred the company clearly related to the process of construction or manufacture of the product are included in the calculation of the cost of production.

4 storage charges, unless they are necessary in the production process, will not qualify as the cost of the product.

Novena. Financial expenses.

1. for the purposes of this standard, they are financial expenses the accrued by the use of financial resources outside the company for the development of its activity. Among others, are considered financial expenses, interest and commissions earned as a result of the use of outside sources of funding, both specific and generic, and the loans from Exchange differences on foreign currency, other than those established in the Norma Décima, where deemed an adjustment to the interest rate of the operation.

When the company use the hedge accounting technique, to identify financial expenses capitalized also consider the impact of the hedging instrument.

2. the financial costs will be incorporated as higher value of stocks that need a period of time longer than one year to be able to be sold, without computing in this period disruptions, and always that you have earned until stocks are able to be used for final consumption or use by other companies.

Financial expenses as higher value of fixed assets in progress that need a period of time longer than one year to be able to use, without interruptions, and provided that such expenses have earned before putting into operating conditions of fixed assets will also be incorporated.

3. the book value of assets 'fit' to capitalize on the financial costs should be calculated as the average of these assets during the financial year, discounting the amount of subsidies, donations and specific legacies that had been received for funding.

4 the addition of financial expenses referred to in the preceding paragraphs, will be held in accordance with the following rules: a) Firstly, it is understood that specific sources of foreign funding of each element are the first to take into account. To these effects, specific funding sources are those which unequivocally have been used for the financing of inventories or fixed assets in course, not considered it as the simple nomination of the debt, i.e., that in any case there should be an identification between the financed asset and the corresponding debt; in particular, for stocks of long cycle of manufacture shall be considered, where appropriate, as sources of funding specific commercial debts corresponding to the different members of your production cost items.

The relevant part of the amount of the financial expenses accrued by specific sources of funding, will fall as higher asset value in production or construction to which reference has been made.

If part of this financing has generated income, it is understood that during his period, these funds have not been applied to finance fixed assets and, consequently, such expenses should not be subject to capitalization in the proportional part associated with funding that has given rise to these revenues.
(b) to the book value of manufacturing inventory and fixed assets in progress that is discounted once the part funded by specific sources will be assigned proportionally, as part of the funding, the rest of non-commercial borrowing, excluded in any case, specific funding for other elements of the asset.

Financial expenses accrued by the update value of provisions, in principle, do not constitute financial costs related to the production of an active, except that in a certain way they had to qualify as such.

(c) the expenses referred to in the letter will be calculated on the basis of the weighted average interest rate, to be determined in the following way: c.1. Once certain commercial debts excluded outside funding sources, total financial expenses accrued by them will be calculated. The weighted average interest rate is obtained by linking the two above components and will reflect the cost of use of outside funding.

c.2. the size obtained in the preceding paragraph shall apply to the part of investment in stocks and fixed assets granted once the part funded with specific borrowing, with the limit for this difference in the amount of borrowing not obtained specifically for these operations, excluding commercial debts.

The amount of financial expenses that the entity will capitalize on the year shall not exceed total financial expenditure is incurred during that same period.

5 the date for capitalization is one in which the entity meets, for the first time, all and each one of the following conditions: a) incurred costs should be included in the production cost of the asset.

b) incurred in susceptible to capitalize on financial expenses.

c) are carrying out the activities necessary to prepare the asset for that intended use or sale. These activities include the relevant technical and administrative work prior to the commencement of construction in the strict sense, such as the activities necessary to obtain the permits prior to the commencement of construction. However, are mere possession of the asset outside these activities when this is not subject to production or any development involving a change in its status.

6. the capitalization of financial expenses will be suspended during the period in which remain disrupted activities related to the manufacturing or construction of the property, unless the cessation of these activities come tax restrictions inherent to their manufacture or construction.

7. the capitalization of financial expenses ceases when all the activities necessary to prepare the asset for the use to which it is intended or sale are completed. An asset is usually prepared for that intended use or sale, when completed the physical construction of the same, although still need to carry out administrative tasks or minor modifications.

If it's an asset made up of parts that can be used separately, shall cease the capitalization of financial expenses at different times for each part of the assets.

In particular, in the case of land and plots, the capitalization of financial expenses will not cease when these are available for carrying out the construction, except that disruption of the actions necessary to prepare the asset for the use to which it is intended or for sale.

8. the inclusion of activated financial expenses must be placed in the financial result. In this sense, to the extent that the amounts are significant, a game will be created in the financial margin with the denomination «Incorporation into the assets of financial expenses».

9 advances long-term delivered on account of future acquisitions are outside the scope of this standard and, therefore, financial costs associated with its financing are not capitalized.

Tenth. Exchange differences on foreign currency.

1 by application of the principle of the acquisition price, the exchange differences on foreign currency not should be considered as corrections in the cost of production of fixed assets or stocks, unless they can qualify as an adjustment to the interest rate of the operation. However, when the exchange differences occur on debts in foreign currency intended for specific financing of fixed assets in progress or stocks of long cycle of manufacture in the process, must be potential profit or loss as more or less cost of relevant assets, provided that each and every one of the following conditions are met (: a) differences generating debt used unambiguously for the construction of a fixed asset or inventory manufacturing, concrete and identified.

(b) construction of fixed assets or stocks making period exceeding twelve months.

(c) the variation in the exchange rate occurring prior to non-current assets is in working order or which stocks they are able to be used for final consumption or use by other companies.

2 capitalised amounts shall be regarded as one element of the cost of production of fixed assets or stocks and, therefore, will be subject, where appropriate, amortization and impairment value correction.

Eleventh. Methods of valuation of stocks.

1. the cost of inventories of products that are not usually interchangeable, and the goods and services produced for specific projects, will be determined using the method of specific identification of their individual costs.

2 when you try to assign value to specific goods that are part of an inventory of goods interchangeable between themselves, will be adopted in general the average price or weighted average cost method. The FIFO method is acceptable and can be taken if the company considered 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, possessed at the beginning of the period, and the cost of the same items purchased or produced during the period. The FIFO method assumes that inventories purchased or produced before products will be sold first, and consequently, that the products remaining in ending stocks will be produced or purchased more recently.

4. in General, the application of the above methods will be during the fiscal year, whenever the corresponding inputs and outputs of stocks they place. However, will accept the application of these methods every certain period of time, which is always necessary for the management of the company and in such a way that the end of the last period coincides with the closing date of the exercise. In any case, must be systematically and uniformly to all stocks of the company.

5. for the purposes of the valuation of stocks, purchases returns shall be charged as lower value stocks return object; in the case that it was not feasible to identify stocks returned they shall be charged as a lower value of inventories that apply according to the inputs and outputs of inventory management method used by the company.

6. for the purposes of the valuation of stocks, from sales return will be for the price of acquisition or production cost that corresponded them according to the inputs and outputs of inventory management method used.

7. the «rappels» by shopping, i.e., discounts and similar that are based on having reached a certain volume of orders, as well as other discounts originated, among other causes, for breach of the conditions of the order that are subsequent to the receipt of the invoice, shall be charged directly as a lower value of inventories that caused them; If a part of such stocks could not be identified, the «rappels» and other discounts and similar shall be charged as a lower value of inventories identified in proportion to the discount that will be attributable; the rest of the «rappels» for shopping and other discounts and similar are counted as less discounting purchases for the year.

8. in accordance with the principle of consistency contained in the first part of the chart of accounts, once adopted a method of costing must be kept evenly in time and applied to the set of stocks of the company to present similar characteristics or nature. However, on an exceptional basis, the method of valuation of stocks can change whenever there has been a change in circumstances requiring the change of criteria to achieve a better reflection of the true picture of the patrimony, the financial situation and results of the company, which must provide annual accounts.

In this sense, in changes in accounting principles in the assessment of stocks will have to take into account the standard of recording and valuation of changes in accounting principles, errors and accounting estimates of the chart of accounts.
Twelfth. Cost of inventories in the provision of services.

1. the criteria listed in the previous rules will be applicable to determine the cost of inventories of services.

2. stocks will include the cost of production of the services, so has not been recognized corresponding income pursuant to the standard registration and valuation on income from sales and services of the chart of accounts.

3. these costs consist primarily of labor and other costs of personnel directly involved in the provision of the service, including supervisory personnel, and attributable overheads.

Labor and other costs related to sales and general administration staff are not included in the cost of inventories. Stocks by service delivery costs not included profit margins or indirect costs not distributable to, often, they are taken into account in the invoiced prices.

Thirteenth. Particular rules.

1 construction companies: 1.1 disbursements incurred in the acquisition of General and specific installations, as well as initial costs of preliminary or works project will qualify as inventory and counted in accordance with the following rules: a) General and specific facilities: shall be charged during the period the work or works that are directly related. This allocation will take place linearly during the duration of the work or proportionally to the ratio of incurred costs and planned costs of work.

(b) initial expenses of pre-project or project: initial draft or project, prior to their allocation, costs will be assessed by the actually incurred, until such is not known if the project has been or not awarded. If not, shall be charged to the results of the exercise, and should be, they shall be charged in accordance with the letter to) earlier for General and specific installations.

1.2. the method of the fulfilled contract, regulated in the rules of adaptation of the chart of accounts to the construction companies, is not applicable. Instead, in accordance with the standard registration and assessment of revenue from sales and services of the chart of accounts, when the outcome of a transaction involving the rendering of services cannot be estimated reliably, be recognized revenue, only to the extent they are considered recoverable expenditure recognised.

2. real estate companies: 2.1 the distinction between land and lots will be in each case according to the legislation in force. Will be included in the purchase price costs of conditioning as closures, movement of land, sanitation and drainage works, as well as the demolition of buildings when required to carry out works of new plant; and also the cost of inspection and surveying when they carried out prior to its acquisition.

They will be part of the price of acquisition or production cost of constructions, as well as all those facilities and elements that have character of permanence, inherent in construction rates and fees of practitioners of project and construction management.

In constructions intended for own use or exploitation in lease, shall appear separately the value of the field or solar, which has been built, and that of buildings and other constructions.

Construction accounted for in stock, once construction is included in the value of buildings and other constructions the value of land plots on which ever built.

(2.2 in the allocation of costs to the works in progress should be taken into account the following rules: to) the allocation of joint costs shall be based on criteria or indicators as objective as possible and that they conform to common practices in this respect in the industry, always under the guidance of which costs assigned to each item or specific or individually alienable part of the works whether parallel or proportional to the value of market or making them more.

(b) the criteria of valuation or allocation of costs to be preset systematically and must be kept evenly over time.

2.3. the goods received by the recovery of claims will be assessed by the amount by which figure accounts corresponding to the received good credit, plus all those expenses that they cause as a result of this operation, or the reasonable value of the asset received, if this is lower.

In the event that goods received by recovery of claims, are goods previously sold by the company, the incorporation of the assets to the asset of the same will be held by the cost of production, or in his case, by the purchase price, provided that the amount obtained by it should be sold to a third party was , as minimum, equivalent to the quoted value.

2.4. in regard to the activation of financial expenses, you should follow the general criteria included in the Norma Novenas of the present resolution.

2.5. the costs of compensation to tenants for a contract are counted as an intangible fixed assets (the new contract acquisition costs), if revenues in the situation achieved after the compensation allowed to recover indubitable way, at least, the amount of the aforementioned more disbursement the quantities required for the generation of future revenues.

International indicated, the application of this criterion only occurs if: to) is possible to quantify the foreseeable future net income to get in the situation after the compensation.

(b) the operation as a whole put shows in a clear and direct an increase in the generation of future net income with respect to which would generate the contract subject to termination by an amount equal to or greater than the compensation of.

2.6. the costs and revenues related to accessory activities which may be made in real estate, before or during the period of manufacture or construction, will be recognized on account of profit and loss in accordance with their nature provided that they are not essential to put assets in operating condition.

2.7 when the acquisition of land in Exchange for a construction agreed to perform in the future, the ground or the part of it which is incorporated into the heritage of the real estate company will be valued at fair value, or according to the fair value of the obligation associated with the delivery of the future construction if this value were more reliable.

2.8. in relation to the stock of buildings acquired or built for sale in timeshare, for the purposes of valuing stocks late, and therefore calculate the 'cost of the sold buildings', the cost of the building will fall within units or minimum use fixed shifts. (To perform this allocation will take into account: to) that there are days in the year that be reserved for repairs or maintenance can not be configured as use shifts.

(b) some concrete houses are not sold at fixed shifts of exploitation that are reserved to the owners or users who can not occupy its dwelling in the turn in have a right, by breakdown or other cause.

(c) since the demand and the market value of fixed shifts of harvesting depends on its situation in the calendar, in application of the principle of prudence cost imputed to shifts of a house or apartment recycling it will be distributed in proportion to the initial value of each sale.

3 companies in the wine sector: 3.1 solar unbuilt and agricultural land: costs of conditioning as closures, movement of land, sanitation and drainage works, as well as the demolition of buildings when required to carry out works on new plant, or allow the agricultural holding, including in this case the costs of access and clearance of the land shall be included in the purchase price prior to planting, provided that they are closely linked to the value of the land and are not identified as a depreciable element, in which case you will be graded according to their nature; the cost of inspection, survey plans and studies are also included where they carried out prior to its acquisition; in no event will include the value of the plantation, whose amount will be recorded as a separate asset.

The expenditures to be incurred during the period of time required to recover or repair the initial productivity of agricultural land that is cultivated the vine as a result of its use during a series of periods (among others, the manure, fertilization, airy ground, etc.) will be accounted in accordance with the general criteria covered in the resolution of 1 March 2013 of the Institute of accountancy and audit of accounts, by which dictate standards of registration and valuation of plant and equipment and investment property.
3.2 plantations and replanting: your assessment includes the price of acquisition or production cost of the elements necessary to implement conditions of farm land, owned by the company, intended for this purpose; They include, among others, strains, feet, grafting, poles and wiring the Bower of the vine, etc, and the elements that are closely linked to planting and bearing character of permanence. Costs accrued prior to the first production crop, i.e., since the Plantation is able to produce income on a regular basis, will be incorporated as a higher value of the planting including, where appropriate, financial expenses pursuant to the Norma Novenas.

The value of the agricultural land is not included as a higher value of the plantation, appearing as an asset apart.

3.3 soleras and criaderas: is the liquid obtained from grapes or from the distillation of wine that are introduced permanently in boots or barrels where to generate the set of organisms («flower» or «mother») that allow the production of wines and wine products, and therefore needed to put those assets under operating conditions. The cost of production of soleras and criaderas will consist of the acquisition price or production cost of the grape juice, broth or distillate that introduced in the boot or barrel loses its nature and passes through natural transformation into «flower»; for its determination must demonstrate through technical studies allow her objectification, taking as a basis the part of the introduced stock that never will be issued as a wine product for sale.

Will also be part of the production cost amortization of the barrel or boot where «flower», is generated by the party proportionally corresponding during the period of time necessary for its formation, and other indirect costs that are attributable to its manufacture; during the process of formation of the «flower» such as the amortization of the part corresponding building (cellar) where they remain until the formation of the «flower», manipulation and adding costs, etc.

In principle, it is considered that this asset is not depreciated systematically, since it will regenerate by the productive process itself, and therefore will not be subject to depreciation, without prejudice to possible impairment losses that may be applicable.

3.4 stock of grape and wine or wine derivatives: 3.4.1 the grapes purchased from suppliers which is embodied in the winemaking process, will be valued for the price of the acquisition, which must be added all those necessary expenses until their incorporation into the winery.

In the event that the grapes used in the wine-making process is self-produced, must be carried by the cost of production, including vintage or harvesting and transport to the winery. These effects will take into account the following: a) if any losses arising from the characteristics of agriculture in the production of grapes, i.e., those who on a regular basis are generated in their production and are distinct from those qualified as exceptional in the following point, will form part of the cost of production of the grapes obtained in a homogeneous unit of production. For these purposes means homogeneous unit of production that plot or set of plots that produces grapes with matching characteristics, whether by final use in a wine product or because their growing conditions allow to regard it as a productive element.

(b) in the case of climatic conditions or uncontrollable health adversity and of an extraordinary nature will be considered, in any case, as a loss for the period in which they arise, notwithstanding as directed for compensation received from insurance pursuant to the Norma Sexta, paragraph 3, of the present resolution.

(c) in any case for the estimation of the grapes incorporated into the production process of the wine you will attend to the weighted average cost.

3.4.2. the valuation of wine comprises the acquisition price or production cost of grapes and other raw materials incorporated into the production process, as well as the directly attributable costs (de-stemming, pressing, fermentation, racking, mix, ageing, bottling, cleaning, etc.) over the reasonable portion of indirect (maintenance, depreciation of the boots or barrels, etc) that are charged to the final product.

In no event will be general costs of administration or direction as well as commercialization of the company nor to excess productive capacity in the period.

3.4.3. in regard to the activation of financial expenses, you should follow the general criteria included in the Norma Novenas of the present resolution.

4. sports federations: 4.1 expenses incurred for the Organization of sporting events: the designation of a Sports Federation as organizer of a sporting event involves access to an activity of organizing an event in which are obtained as consideration income from box office and advertising, among others. Thus, the contract is the provision of a service for the company, and where the conditions for the recognition of income were not produced, it will be an ongoing project, being applicable to the criteria laid down in this resolution to quantify the cost of inventories.

(a) marketing costs (those that incur an entity to carry out the commercialization of products and are, therefore, necessary to carry out the sales and deliveries of products) and general costs of administration or address (those incurred an entity to carry out the management, organization and control, being not related to the production cycle) will not form part of the cost of production.

(b) not be included within the cost of producing those prior to the designation or others who have a similar to outlays.

(c) in stocks of products in course requiring a period of time longer than one year to be able to generate income for services, will be included in the cost of production, financial expenses that correspond to finance others, specific or generic, directly attributable to the implementation of the project.

4.2 animal sports: 1. calves intended for sporting activity will be included in inventory at the time of his birth, to the effects of his physical registration, and will be valued at their cost of production in accordance with the general criteria laid down in the present resolution.

2. at the close of each financial year, the offspring will be assessed by the best estimate of the cost incurred in their feeding and care in accordance with the general criteria collected in the present resolution, to date according to the animals concerned fulfil the precise conditions for sports activities.

Fourteenth. Information to include in memory.

The following information must be included in the notes on the accounts: 1. criteria for allocation of indirect costs to employees and, in case of exceptional and justified reasons are arrived to modify these criteria, should be noted these reasons, indicating the quantitative impact that produce these changes in the annual accounts.

2. where appropriate, is should conveniently justify the application of the standard cost and the retail method for the valuation of stocks to the extent that this assessment does not differ significantly with respect to the assessment that deduce after applying the provisions of the present resolution.

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

4. the financial costs capitalized as part of the cost of production of the assets and, if that has been used, the weighted average rate regulated in paragraph 4 c) of the ninth rule of the present resolution. In particular must be adequately explain the approach followed in relation to the exchange differences and, where applicable, an adjustment to the interest rate have been considered.

5. the value assignment methods for rating stocks and periods used in the application of these methods.

6. the influence of the returns of sales and purchases in the valuation of stock returns.

7. the influence of the «rappels» by shopping and other discounts and similar resulting from breach of the conditions of the order after receipt of the invoice, in the valuation of stocks.

15th. Entry into force: this resolution shall apply, without retroactive effect, in the formulation of the individual and consolidated annual accounts of the exercises initiated after 1 January 2015.

Madrid, April 14, 2015.-the President of the Institute of accountancy and audit of accounts, Ana María Martínez-Pina García.