Changes to German accounting law
German accounting legislation has been updated to comply with the EU Accounting Directive.
The new Accounting Directive Implementation Act (BilRUG) aims to bring German accounting law into line with the EU Accounting Directive (2013/34/EU). It reduces the burden on small, medium-sized and large companies wherever possible.
The Act primarily amends or supplements the German Commercial Code, the German Disclosure Act and the German Stock Corporation Act, as well as their related implementing acts. New provisions include the following.
- Where the anticipated useful life of an internally created intangible asset or of goodwill acquired for valuable consideration cannot be reliably estimated, the cost is amortised over ten years.
- Monetary thresholds for determining size of a company (Section 267 of the German Commercial Code) and the exemption from the duty to prepare consolidated financial statements (Section 293) are raised between approximately 4% and 24%.
- Financial holding companies can no longer take advantage of the relief for micro enterprises.
- The definition of revenues is expanded.
- Extraordinary income and expenses are no longer permitted to be recognised as separate items on the income statement and recognition of the result from ordinary activities has also been eliminated.
- Companies with deferred tax liabilities that are at least medium-sized must make quantitative disclosures in the notes regarding deferred tax balances.
- The report on post-balance sheet events is now included in the notes.
All amended provisions apply to financial statements and management reports for the financial year beginning after 31 December 2015; so, if the financial year is the same as the calendar year, they will be applicable to 2016. However, it is still possible to apply the thresholds and amended definitions of revenues to financial statements and management reports for the financial year beginning after 31 December 2013.
For more information, contact:
Ebner Stolz, Germany
T: +49 711 2049 1317