Assets and liabilities must be valued as of the balance sheet date

Unrealized losses must
be recognized (subject, however to certain conditions and to
a restriction for provisions for anticipated losses on pending
transactions – see below), whereas unrealized profts are not
recognized. Assets are carried at cost, less depreciation if ap-
plicable, or at their lower going concern value (Teilwert).

Going concern value is defined as the amount or fraction of the total
purchase price which a purchaser of the entire business would
allot to a specifc asset assuming the purchaser intends to
continue the business. This lower going concern value may only
be recognized if the impairment in value is considered to be of
lasting nature. The write-down to a lower going concern value
is optional for tax purposes. If the reason for the impairment
in value no longer exists, the write-down must be reversed. In
general, all assets with a useful life in excess of one year must
be capitalized on the balance sheet. An exception applies for
depreciable movable assets whose acquisition or production
costs are € 410 or less – so-called assets of minor value (gering-
wertige Wirtschaftsgüter). These assets can be expensed in the
year of the acquisition or production.

Alternatively, assets pur-
chased at prices from € 150.01 to € 1,000 can be aggregated for
each assessment period (so-called pool items) and depreciated
over five years. In addition, assets purchased at prices of € 150
or less can be expensed in the year of acquisition or production.
Intangible assets must be refected on the balance sheet if
acquired for consideration, in which case they are amortized
over their useful life. Capitalization is prohibited for self-created
intangible assets and intangible assets acquired gratuitously.