# Modelo 720 - how to calculate the average balance for the last quarter?



## PeterDonald (Feb 28, 2017)

Hi

Can't help feeling I'm over complicating this but can anyone tell me the correct way to calculate the average balance for your bank accounts over the last quarter? Do you simply average the value on the first and last day of the quarter? Or average a value for each month?

Thanks!


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## jimenato (Nov 21, 2009)

PeterDonald said:


> Hi
> 
> Can't help feeling I'm over complicating this but can anyone tell me the correct way to calculate the average balance for your bank accounts over the last quarter? Do you simply average the value on the first and last day of the quarter? Or average a value for each month?
> 
> Thanks!


There are various ways of doing it mathematically but I don't know of any which would be considered more 'correct' than any other. 

Maybe there is an 'accepted' rather than a 'correct' way.

Who is asking or why do you want to know?


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## Turtles (Jan 9, 2011)

I'm sure my reply will attract opposition, but here goes.
It is completely impossible to fill out this declaration in total accordance with the rules. It asks for details that are unobtainable because they have no foreign equivalent. All you can do is supply something that you can explain later. This will not guarantee that the authorities will accept what you say, but showing you have tried ought to give you some kind of protection.
Your suggestions for calculating average balances seem perfectly sensible to me. 
As the absurd fines for non-compliance or even spelling mistakes have now been declared illegal by Brussels I can only hope that big changes to the system will have come in before next year.


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## jimenato (Nov 21, 2009)

Ah! Sorry - missed that it was for a 720 declaration.

No idea.


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## tebo53 (Sep 18, 2014)

PeterDonald said:


> Hi
> 
> Can't help feeling I'm over complicating this but can anyone tell me the correct way to calculate the average balance for your bank accounts over the last quarter? Do you simply average the value on the first and last day of the quarter? Or average a value for each month?
> 
> Thanks!


Take the values from the end of each month, add them up and device by 3. That's what I was told


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## Alcalaina (Aug 6, 2010)

I just use the value as of 31 December, and it's never been questioned. Ditto the exchange rate.


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## skip o (Aug 1, 2011)

I was told NOT to "take the values from the end of each month, add them up and divide by 3." 

To calculate your average daily balance you must total your balance from each day in the billing cycle (even the day's that your balance didn't change) and divide the total by the number of days in the cycle.

It's ridiculous. Given the number of conflicting information I have received from various accountants I am pretty sure about 100% of all 720s submitted in Spain have mistakes.


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## Turtles (Jan 9, 2011)

I'm just in the process of determining if I need to submit the form for 2016, and I realise that to make that decision I will need to collect all the information that I would need to submit anyway. I love this time of year.


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## manclad (Jul 9, 2013)

I asked my daughter in the UK who used to be an accountant how to calculate the average balance for the last quarter of the year, her reply was to add together the balance on the 1st October and the balance on the 31st of December and divide by 2 , that's the average balance , this is what I've done so hope its ok..


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## CharlieMCFC (Jan 27, 2016)

manclad said:


> I asked my daughter in the UK who used to be an accountant how to calculate the average balance for the last quarter of the year, her reply was to add together the balance on the 1st October and the balance on the 31st of December and divide by 2 , that's the average balance , this is what I've done so hope its ok..


Let's say that most days your account balance is around zero. But on the 1st October you bought a house and so, just on that one day, you had €100,000 in your account to pay for the house. Your average balance, calculated this way, would then come out as €50,000, which doesn't seem to be a true reflection of your account finances. 

Maybe the moral here is to buy houses on the 30th September, not the 1st October ;-)


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## skip o (Aug 1, 2011)

"Average daily balance" is a specific thing, and it is only calculated one way. ADB is calculated differently than quarterly averages or monthly averages.


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## Juan C (Sep 4, 2017)

I was told today that MS Excel program can do it
Otherwise: total the amounts each day and then dividing by 91. 

Other methods like the amount on say first day and the last could be way out. First day €5 last day 5€. That would show an average of 5€. However there might have been 1,000 paid in on second day which was draw out on penultimate day. !!!!


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