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What is an Inventory and Annual Accounts Book?

What is an Inventory and Annual Accounts Book?

By Clara Cera

Published: May 13, 2025

The Inventory and Annual Accounts Book is one of the mandatory accounting books that all commercial companies must keep.

Beyond its mandatory nature, this book is essential to know the financial situation of a company.

In this article, we take a look at everything you need to know: what it is, how many parts it consists of and the regulations it must comply with.

Shall we go there? 👇


What is an Annual Inventory and Accounts Book?

The Inventory and Annual Accounts Book is an accounting document that gathers financial information of a company during a specific financial year (usually annual) and in relation to its:

  • Assets,
  • rights,
  • and obligations.

How is an Inventory and Annual Accounts Book made?

The Inventory and Annual Accounts Book is made up of four documents that show the economic reality from different perspectives and at different times.

So, what is the content of the Inventory and Annual Accounts Book? This book is composed of the following reports:

  1. Opening balance sheet,
  2. Trial balance,
  3. Inventory of closing of the fiscal year,
  4. Annual Accounts.

Let's see them in more detail!

1. Opening balance sheet

The opening balance sheet shows the detailed situation of a company at the beginning of the accounting period.

For this purpose, it takes into account all the assets available to the company, taking as a reference the inventory at the close of the previous fiscal year.

🔵 Example of the opening balance sheet:

2. Trial balances

In plural because it must be carried out at least every quarter of the accounting period.

Also called trial balance, it is responsible for reflecting and analyzing the evolution of the company through its accounting accounts. It shows, then, the profits and losses during a specific period.

☝ ️ The Trial Balance extracts the information from the General Ledger accounts, which is prepared on the basis of the company's income and expenses.

🔵 Example of Trial Balance:

3. Year-end inventory

The year-end inventory lists all the company's assets, rights and obligations at the end of the fiscal year.

☝️ It defines the closing stocks (assets), according to their quantity and value, and the obligations (liabilities).

🔵 Example of the year-end inventory:

4. Annual Accounts

Finally, the purpose of the Annual Accounts is to show the financial situation at the end of the accounting period, as well as the result of the fiscal year.

The Commercial Code establishes as mandatory the preparation of 5 financial statements:

  1. The Balance Sheet;
  2. the Income Statement (or Profit and Loss Statement);
  3. the Statement of Changes in Equity for the year (ECPN);
  4. the Cash Flow Statement (CFS);
  5. the Notes to the Financial Statements.

☝️ The General Accounting Plan details the regulations that companies must follow to prepare these documents, as well as some exceptions depending on the characteristics of the companies.

What is the function of an Inventory Book?

The Inventory and Annual Accounts Book allows to know the financial situation of an entity throughout the accounting year:

  • At the beginning,
  • during the course of the year,
  • at the end.

Therefore, it is a book of great importance because it allows to control the assets and liabilities of the company at any time.

☝️ With a good control of finances, it is easier to comply with established legislation.

Legal aspects: obligations and regulations

As we have already mentioned, the Inventory and Annual Accounts Book is mandatory.

But is it for all companies and freelancers? The answer is: no, only for commercial companies.

According to the General Accounting Plan, these companies, apart from keeping the accounts, are obliged to carry out a legalization of the accounting books.

This means that they must submit the book to the Commercial Registry within four months from the end of the accounting year, either by telematic means or through the Provincial Commercial Registry.

☝️ Be careful with the forms! Failure to comply with the regulations may result in penalties. The Book of Inventories and Annual Accounts must be:

  • Clear,
  • chronological,
  • without spaces or erasures,
  • without abbreviations or symbols of confusing interpretation.

If you walk with others, you will go further

It is well known that accounting can be a tedious task. Even so, when the law requires it, there are no excuses: you have to do it!

In that sense, there are tools or applications that can help you keep your accounts up to date without too much effort.

Having an accounting software is useful to automate multiple processes and create different reports that allow you to analyze the financial reality.

Would you like to check it out?

Article translated from Spanish