Income statement must be prepared by corporations
The income statement must be prepared by corporations and
“KapCoGesellschaften” in vertical form using either the nature
of expense method or the cost of sales method.
For each of these two methods, the form in which the income statement
needs to be structured is prescribed by law. When selecting the
form of presentation of the income statement, enterprises other
than corporations and “KapCoGesellschaften” are only required
to comply with the principle that financial statements must be
clear and understandable; in practice, the form of presentation
used for corporations is usually followed.
The German Commercial Code provides for extensive relief
for subsidiaries that are included in the consolidated financial
statements of a parent company domiciled in the EU or in an
EEA state. Provided the individual requirements are met, these
companies are not obliged to prepare notes to the financial state-
ments or a management report. In addition, they are not required
to follow the regulations of the German Commercial Code that
apply to corporations, but are rather subject only to the general
accounting regulations (particularly classifcation regulations
in the balance sheet and income statement).
They also are not
required to have the annual financial statement audited and
published.
EU Forecast
euf:ba18f:104/nws-01