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Accounting and audit 18 May 2018

The expert accountant: a key interpreter of the regulations

Mª Ángeles Peláez, Head of Group Financial Accounting at BBVA, underscored the importance of the role of the expert accountant in correctly interpreting the wording of regulations in an environment of constant regulatory change. This was one of the subjects debated at the workshop on Standardization and Accounting Law organized by the Spanish Association of Accounting and Business Administration (AECA) at BBVA’s headquarters in Madrid.

The event was attended by Alejandro Rubio González, technical secretary of the Ministry of Economy, Industry and Competitiveness, who gave the opening address in which he focused on the latest changes in accounting and auditing regulations in Spain embodied in Royal Decree 18/2017. In his opinion, the main goals of the new legislation are standardization and improvement of non-financial information of institutions and accommodating it for SMEs.

As in previous years, BBVA assisted in organizing the event. Ricardo Gómez Barredo, Head of Accounting & Supervisors welcomed attendees, while Mª Ángeles Peláez, Head of Group Financial Accounting, closed the session alongside Leandro Cañibano, the AECA chairman. In her speech, Mª Ángeles Peláez emphasized the importance of the accounting profession, particularly in the current environment of regulatory hyperactivity. She argued in favor of simplifying the new IRFS for SMEs within a common accounting framework.

From left to right: José Luis Lizcano Director of AECA; Ricardo Gómez:  Head of Accounting & Supervisors. BBVA Group; Leandro Cañibano: Chairman of AECA; Alejandro Rubio González, Technical  Secretary of the Ministry of Economy, Industry and Competitiveness; Mª Ángeles Peláez: Head of Group Financing Accounting; Enrique Rubio: Chairman of the Institute of Accounting and Auditing; Enrique Ortega: Head of Accounts Principles in AECA; Cleber Custodio: Partner of Deloitte’s Excellence Center

The chairman of the Institute of Accounting and Accounts Auditing (ICAC), Enrique Rubio, spoke about modifying international regulations on auditing. In his presentation he pointed out that the General Accounting Plan (PGC) does not take on board the changes in the expected loss model ushered in with the approval of IRFS 9. The underlying reason for this is that the regulations focus mainly on financial institutions which have already provided for this in their standards while its inclusion within the General Accounting Plan could impose a strain on non-financial institutions. He also touched on current legislation on non-financial information which in his opinion leaves companies a great deal of room for maneuver. The regulations require companies to cover minimums on environmental, social, the fight against corruption, bribes and the protection of human rights issues.

There were a number of roundtables at the workshop in which heads of regulatory bodies and accounting standardization institutions, auditora, Spanish university professors and partners in big firms took part. José Mª Vallejo, Head of the Group Tax Department at BBVA, joined in the last one on the criteria of the accounting expert and corporate information. The head of the Group’s tax affairs raised the issue of deferred tax assets (DTAs), which has a significant impact on the solvency of financial institutions. José Mª Vallejo emphasized that DTAs are not tax credits but technical solutions to problems such as double taxation and the recovery of losses in periods of crisis. He also pointed out that in many cases these credits are equivalent to prepayments that have already been disbursed. The BBVA Tax Department head also explained that Spanish legislation does not favor financial institutions despite them having accumulated more DTAs than in other jurisdictions. Bearing in mind that overseas institutions are subject to the same solvency rules, their Spanish counterparts are at a disadvantage. Here, José Mª Vallejo welcomed the standard guaranteeing DTAs, which is helping to ease the problem by allowing the possibility of paying a “surety” based on taxes already paid as a means of guaranteeing DTAs. The workshop has become a forum of reference for the sector on accounting and tax law where professionals can exchange views on Spanish accounting standards. Over 150 people took part in the event this year.

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