The balance update is the adjustment of the value of the assets of a company so that they have the current real value, due to the increase in the cost of living. It is about reassessing the assets of a company to adjust them to the rise in inflation.
This revaluation is made on tangible fixed assets, such as real estate, machinery or computers. In updates to the situation balance We cannot choose the assets we want to update and we must update them all. However, the value of assets already depreciated cannot be adjusted.
The updates of balances in accounting offer a great benefit to the company, since it allows to increase the real value of the company. One of the advantages of updating balance sheets is that it allows you to adjust the accounting values of each of the assets, so that the balance sheet perfectly shows the assets of the company. These adjustments are aimed at improving the financing of Spanish companies and improving access to the capital market.
In the latest tax reform, companies are allowed to update their balance sheets on a voluntary basis. This is very beneficial for companies because they no longer have to wait for the regularizations to be carried out by the State. It should be noted that there is a tax on balance sheet updates that consists of 5% of the increase in the value of the revalued assets.