Reporting a Matrices: Financial Reports in English for Multinational Subsidiaries
Nextica Law & Tax prepares the reporting of Spanish subsidiaries to their parent company: monthly close on the group's calendar, P&L, balance sheet and cash flow statement in the parent's format, budget versus actual with variance commentary, forecast, and the consolidation package with the conversion adjustments from the Spanish PGC to IFRS or US GAAP. In Spanish or in English, on the group's templates and on time.
At Nextica Law & Tax, we have extensive experience in accounting advisory and financial consulting for large companies, subsidiaries of multinationals, and reports to parent companies, as well as in the accounting management of businesses at all stages of growth. We adapt to the needs of each type of company, ensuring that all accounting and tax obligations are fulfilled correctly, optimizing management, and facilitating growth. We know what a parent company demands, in what format they require it, and when they expect it. And we always deliver on time.
REPORTING TO THE PARENT IS READ IN TWO CAPITALS AT ONCE
What the subsidiary reports to its parent does not stay in the group: the auditor, the tax authority and the regulators of two countries read it. The four points where the two readings clash:
Two accounting languages, one close
the parent's package comes in IFRS and the local books in Spanish GAAP, and unreconciled criteria differences end up as audit adjustments.
Regulation (EC) 1606/2002What is reported to the parent is also read by the tax authority
the intra-group prices in the reporting are the related-party transactions of the tax return, and the two pictures must match.
art. 18 of the Corporate Income Tax LawSustainability now comes in the package
the sustainability information the parent consolidates is requested from subsidiaries with format and deadlines — and the subsidiary rarely has the data ready.
Directive (EU) 2022/2464The impossible closing calendar
if the package is due on the 5th, the local close cannot start on the 3rd. Late reporting is fixed with processes, not overtime.
What's included
Monthly close within the group's calendar (usually between D+5 and D+10 of the following month).
P&L, balance sheet and cash flow statement in the parent's format and chart of accounts.
Budget versus actual, with variance analysis and explanatory commentary.
Year-end forecast, updated every month.
Consolidation package
elimination of intragroup balances, currency translation and reclassification adjustments.
Conversion table from the Spanish PGC to IFRS or US GAAP, with every difference identified and documented.
Supplementary information requested by the group
CAPEX, headcount and sector operating KPIs.
Spanish statutory accounting in parallel
annual accounts, filing with the Commercial Registry and tax obligations.
Reports in Spanish or in English, on the group's templates and systems.
WHAT REPORTS WE PREPARE — CONTENT AND DEADLINES
P&L (Profit and Loss Statement)
in the matrix format, with the account structure and the KPIs required by the group.
Balance sheet
assets, liabilities, and equity in the group's standard.
Cash flow statement
cash and cash equivalents movements as per the required format.
Budget vs. Actual
comparison of actual results against approved budget, with analysis of variances and explanatory comments.
Updated forecast
projection of the closing of the fiscal year starting from the current month.
Consolidation package
intragroup balance elimination adjustments, currency conversion (if applicable), and PGC → IFRS/US GAAP reclassification adjustments.
Additional information required by the matrix
capital expenditure (CAPEX), headcount, specific operational KPIs of the sector.
COORDINATION WITH THE PARENT COMPANY FINANCIAL TEAM
We know that the corporate finance team has its own closing calendars, its own reporting templates, and its own consolidation systems. We adapt: ✓ Compliance with the group closure deadlines: usually D+5 to D+10 of the following month. ✓ Use of the corporate templates: Excel, Power BI, SAP proprietary formats, Oracle, NetSuite, or any other ERP of the group. ✓ Participation in closure calls with the corporate finance team if the client requires it. ✓ Direct communication with the group CFO or Controller when necessary.
En detalle
THE CHALLENGE OF BEING A SPANISH SUBSIDIARY — TWO SIMULTANEOUS REALITIES
A Spanish subsidiary of a multinational group has to comply with two accounting and regulatory frameworks simultaneously: 1. Spanish framework (PGC): mandatory for the legal accounting of the subsidiary. Filing of annual accounts with the Mercantile Register. Settlement of IS, VAT, and other taxes in accordance with Spanish regulations. 2. Group framework (IFRS / US GAAP / proprietary format): the parent company needs the subsidiary's data in the group's accounting standard to prepare consolidated accounts and for internal management decision-making. Reconciling both frameworks without errors, within the deadlines set by the group and with the quality demanded by the parent company, is one of the most demanding tasks for a subsidiary's finance department. At Nextica, we take care of it.
WHAT REPORTS WE PREPARE — CONTENT AND DEADLINES
Monthly reporting
WHAT REPORTS DO WE PREPARE — CONTENT AND DEADLINES
Quarterly and annual reporting
STANDARDS AND FORMATS WE HANDLE
◆ Spanish PGC: General Accounting Plan (RD 1514/2007), mandatory for the legal accounting of the Spanish subsidiary. ◆ IFRS (IAS/IFRS): international financial reporting standards from the IASB, adopted by the EU through community regulations. The most relevant for subsidiaries: IFRS 16 (leases), IFRS 9 (financial instruments), IFRS 15 (revenue from contracts with customers), IAS 36 (impairment). ◆ US GAAP: generally accepted accounting principles in the United States, developed by the FASB. Main differences from IFRS: LIFO method for inventory valuation (not allowed under IFRS), treatment of leases, and revenue recognition. ◆ Conversion table PGC → IFRS/US GAAP: when the parent company requires the data in its standards but the subsidiary keeps legal accounting in PGC, we prepare the conversion adjustment table with all identified and documented differences. ◆ Language: Spanish and English. All reports are prepared in the language required by the parent company.
FREQUENTLY ASKED QUESTIONS
Trust Nextica Law & Tax to customize the accounting service that best suits the needs and dimensions of your company, whether through review or accounting outsourcing.
Frequently asked questions
How long do they take to deliver the monthly reports?
The monthly reports are delivered within the timeframe agreed upon with the company, which usually runs from the 5th to the 10th of the month following the reported period. The exact timeframe depends on the complexity of the subsidiary's operations and the speed at which the company provides us with the documentation for the period (invoices, bank statements, payroll settlements).
Do you work with the parent company's ERP?
Yes. We have experience working with the leading ERPs in the market: SAP (FI/CO), Oracle, Microsoft Dynamics, NetSuite, and Sage. We can input the data directly into the group's system or provide the data files in the import format required by the parent company's ERP.
What are the main differences between the Spanish PGC and the IFRS?
The most relevant differences for Spanish subsidiaries affect: (1) revenue recognition: the PGC follows a more rigid approach than IFRS 15; (2) asset valuation: the IFRS allow the revaluation model while the PGC only admits historical cost; (3) leases: IFRS 16 requires the capitalization of almost all leases, while the PGC maintains the financial/operational distinction; (4) asset impairment: IFRS apply a prospective expected loss model, while the PGC applies the incurred loss model.
Do you also manage the tax obligations of the Spanish subsidiary?
Yes. At Nextica, we offer integrated tax and accounting management services for subsidiaries of multinational companies: bookkeeping, reporting to the parent company, submission of Spanish tax returns (IS, VAT, withholdings, informative) and advice on transfer pricing if there are related-party transactions with the group that exceed €250,000.
Content reviewed by
Elena Bosch Prat
Directora · Consultoría Contable y Financiera
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