The constitution recognises the benefits and importance of associations, and therefore guarantees citizens the right to associate. However, this right does not protect organisations with criminal purposes. So, to ensure that the right to associate is not used as an excuse for fraudulent activities such as money laundering, the administration keeps track of the accounts of associations. However, a group of ordinary residents does not necessarily have to know how to manage the accounts of their association. There are specialist consultancies to help them, but it is worth listing some important concepts about accounting for associations.
Peculiarities of accounting for partnerships.
As we have mentioned before, associations are characterized by pursuing a specific goal . In fact, to establish an association, the administration must officially declare its objective and the activities that will be carried out to achieve it. Of course, if you want something, it will cost you something , so associations invariably need money to achieve their goal.
Economic activities help in accounting for associations
Types of association income.
The first and most obvious source of money for associations is membership dues . In addition, since most associations have public interest objectives, they may also receive donations or grants . This income is the product of the association's own activities and is called exempt income , because it is exempt from taxes.
However, this money is often not enough to cover all the activities of the association. Therefore, it is normal for associations to carry out some economic activity to obtain additional income. Things such as selling lottery tickets, charging admission to some events or charity raffles. This type of income is called non-exempt income and in the accounting for associations it must always be separated from exempt income.
Accounting regulations for associations.
There are several laws that regulate the activity of associations. Among them is usa mobile phone numbers database Organic Law 1/2002, of March 22, its article 14 states that associations are obliged to:
Have an updated list of partners.
Keep accounting records that provide a true picture of your assets.
Indicate the financial situation of the entity.
Have a list of the activities carried out.
Make an inventory of your assets.
Keep a book of minutes of the meetings of its representatives.
Keep accounting records in accordance with other applicable rules.
Based on this list of obligations, there are a series of models that make some procedures easier. The government provides them on the Ministry of the Interior's website for public benefit associations; from which they can be downloaded.
Another basic rule that regulates accounting for associations is the resolution of the Institute of Accounting and Auditing of Accounts that regulates the General Accounting Plan for non-profit entities .
What information do the different types of accounting collect?
In this sense, and as in any other entity, we differentiate between financial accounting , which reflects the true image of the company's accounts; and analytical accounting . In the latter, the objectives change and with it we try to study the costs of the activities and their imputation, without this influencing the presentation and accounting of the economic results of the association (and therefore the taxes) but rather the internal study of the way in which the operation is carried out.
Accounting for partnerships in relation to taxes.
When calculating corporate tax, it is important to distinguish between exempt and non-exempt income . Associations only have to pay taxes on their non-exempt income, that is, on the income from their economic activities. That is why it is so important to separate income according to its origin in the accounting for associations. The way in which associations must pay taxes is regulated by Law 49/2002 on the tax regime for non-profit entities and tax incentives for patronage.
Annual accounts in accounting for associations.
Annual accounts are documents that contain the financial information for a financial year. Their presentation is not essential unless it concerns public utility entities or is specified in the bylaws. In short, it would involve the presentation of the income statement, balance sheet and annual report (if it is not necessary, the statement of net worth and the statement of cash flows would not be prepared).