Constitution

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Approval of annual accounts one of the most significant innovations introduced by law 16/2007, from the point of view of corporate law, are the new accounting documents that are part of the annual accounts. We shall then proceed to describe them briefly, then examine the new criteria for the approval of abridged models of documents that make up the annual accounts. 1.1 Statement of changes in equity statement of changes in equity (ECPN) consists in reality of two documents: (i) the State of recognised income and expenses, which reflects the result of the exercise (the balance of the profit and loss account), and income (resulting from changes in value arising from the application of the criterion of reasonable value) and costs directly attributable to the equity (for example(, Constitution and capital increase expenses); (ii) the total statement of changes in equity, which records the variations in the net equity of the company, including those caused by transactions with partners or shareholders of the same (for example, the variance derived from the provision of reserves in execution of the distribution of the result agreement). The essential purpose of the ECPN is to reveal the increase or decrease of the net worth of the company as a result of income or expenses that have not been recorded in the profit and loss account, and, therefore, do not form part of the outcome of the exercise. In accordance with new article 175 of the LSA, introduced by law 16/2007, may make such shortcuts ECPN and balance the societies that meet at least two of the following circumstances: (i) asset items total not exceeding the 2.850.000 euros. (ii) that the net amount of annual turnover does not exceed the 5.600.000 euros. (iii) that total number of workers employed during the financial year does not exceed 50. 1.2. State of cash flows flow of cash (EFE) or simply cashflow statement, demonstrates the capacity of society to generate effective and reveals their liquidity needs.

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