Memory (accounting)


The report is one of the financial statements used in accounting, it serves to expand the information contained in the other statements. Thus, the report must be presented and prepared jointly with the other financial statements (also called annual accounts).

The function of this financial statement is to complete, expand, comment and clarify the rest of the documents that are included in the annual accounts.

The main purpose of the report is to complement the information provided by other annual accounts such as: the balance sheet, the income statement, the statement of changes in equity and the statement of cash flows. On many occasions, the information provided by the balance sheet and the profit and loss account is insufficient, hence the need for memory.

It is mandatory to present it together with the rest of the accounting documents. It should be noted that the report is of great importance for shareholders, because through it the most important events in the company are related: investments, objectives, achievements and results.

The report is connected to the rest of the financial statements (statement of cash flows, balance sheet, income statement and statement of changes in equity) through cross-entries. The objective of these annotations is to break down and make certain operations carried out by the company more understandable, therefore, it is a document that helps all those interested in it (mercantile registrars, auditors, investors, financial institutions, etc.).

Characteristics of the financial statements

Report formulation

It must be formulated in accordance with the rest of the annual accounts and taking into account that:

  • This must collect the minimum information required, and may be omitted in cases where such information is not relevant.
  • Any information that is necessary for a greater and better knowledge of the situation of the company in the year to which they refer will be included.
  • The quantitative information contained in the report must refer to the fiscal year in which they were prepared, in addition to the previous fiscal year (except for normal accounting to the contrary).
  • What is established in the report to the group companies should be understood in the same way as referring to the multi-group companies.
  • The registration and assessment rules must be adapted for presentation in a synthetic manner and in accordance with the requirement of clarity.

Memory types

  • The ordinary report: It is presented by large companies, which, due to their high turnover and their high volume of assets, require more information. The information relating to this is grouped into 25 notes, to which the other financial statements will refer, indicating the specific number of the report in the column enabled for this purpose.
  • The abbreviated memory: It is presented by small and medium-sized companies, which are not required as high a volume of information as large companies. The main difference between this and the ordinary report is that the abridged report does not include the financing table. The information related to this is grouped into 21 notes and is presented in the same way as in the ordinary memory.

What information does memory contain?

  • The activity carried out by the company, its corporate purpose.
  • It should indicate that the accounts reflect the true image of the company, as well as the accounting principles that have been applied.
  • Information on how the result has been applied.
  • Registration and valuation rules used.
  • Changes that may have occurred in the company's investments.
  • Tax situation of the company.
  • Remuneration of staff.
  • Grants received.
  • Information on the impact of business activity on the environment.
  • Business combinations.
  • Expenses and income.
  • Information on the volume of sales.
  • Joint ventures.
  • Events after the close of the fiscal year.
  • Foreign currency.
  • Transactions in which equity instruments have been used.
  • Information on the expenses of the administrative body (allowances, salaries, remuneration).
  • Form of financing from society.

Tags:  USA ranking administration 

Interesting Articles


Popular Posts




Personal expenses


Information system


Short position