Tax law incorporates by reference the requirements under commercial law

In other words, the commercial
financial statements form an authoritative basis for tax account-
ing purposes (so-called principle of linkage – Maßgeblichkeit).
However, there are also certain specifc tax accounting rules.

Differences commonly arise, therefore, between
the commercial financial statements and the tax accounts.
One unavoidable difference between the commercial financial
statements and the tax accounts results from provisions for
anticipated losses on transactions in the course of completion
(pending transactions).

Such provisions are mandatory under
commercial law, but generally not permitted in the tax accounts.