Accounting principles require that entries be complete, correct, and chronological
Specifcally, German accounting principles require that entries be
complete, correct, and chronological, that annual financial state-
ments be prepared, that all computations be made on a euro cur-
rency basis, and that books and records be maintained in a living
language and retained for a certain period of time. “Loose-leaf”
accounting (Loseblattbuchführung), “open item accounting”
(Offene-Posten-Buchhaltung), and IT-based accounting systems
are acceptable if they meet certain requirements.
Inventories of
goods must generally be compiled, valued, and recorded in the
accounts at the balance sheet date. Reliance on perpetual inven-
tory records is permissible if they are in conformity with the legal
requirements and show the inventory on the balance sheet date.
Additionally, a physical inventory of movable fxed assets must
be taken at each balance sheet date, unless perpetual inventory
records are maintained. Such records are also suffcient for tax
purposes, provided certain requirements regarding detailed infor-
mation on the respective assets are met.
Furthermore, commercial law requires that the accounting sys-
tem be set up in such a way that an independent professional is
able, within a reasonable amount of time, to obtain an overview
over the assets, liabilities, and operations of the company. The
provisions, however, focus on accounting and reporting by
companies.
The objective is to ensure that companies present
a true and fair view of their net assets, financial position, and
operational results. If this is not accomplished by the balance
sheet and income statement alone, additional information must
be provided in the notes to the financial statements.
EU Forecast
euf:ba18f:106/nws-01