Häufig gestellte Fragen
What are the key differences between IFRS and HGB?
The fundamental difference lies in the objective: the HGB is shaped by the prudence principle and serves creditor protection, which is why assets are generally recognised at no more than acquisition or production cost and hidden reserves can arise. The IFRS, by contrast, are capital-market-oriented and intended to give investors a realistic picture, which means a stronger orientation towards fair values. Concrete consequences show up, for example, with development costs (mandatory capitalisation under IAS 38 in IFRS versus an option under HGB), with goodwill (IFRS impairment test instead of scheduled HGB amortisation) and with leasing (IFRS 16 puts nearly all contracts on the lessee's balance sheet). As a result, the HGB result tends to be more conservative than a comparable IFRS financial statement.
Which companies in Germany must report under IFRS?
In the EU, only the consolidated financial statements of capital-market-oriented parent companies are mandatorily prepared under IFRS, i.e. companies whose securities are traded on a regulated market; the legal basis is § 315e (1) and (2) HGB in conjunction with EU Regulation 1606/2002. Parent companies that are required to prepare consolidated accounts but are not capital-market-oriented have the option under § 315e (3) HGB to voluntarily prepare their consolidated financial statements under IFRS. The statutory individual financial statements, however, always remain subject to HGB in Germany, because they form the basis for taxes and profit distributions. In practice, many non-listed mid-sized companies also apply IFRS when international banks, investors or a foreign parent company require it.
Does an IFRS financial statement replace the HGB financial statement?
No, IFRS financial statements do not replace the statutory individual financial statements in Germany. Even capital-market-oriented groups that must prepare their consolidated financial statements under IFRS still have to prepare HGB individual financial statements for each individual company. Via the authoritativeness principle, these serve as the basis for the tax balance sheet and for measuring distributions to shareholders, since an IFRS financial statement is not authoritative for these purposes. As a consequence, companies reporting under IFRS usually run parallel accounting, in which the same business transaction is carried in two valuation frameworks.
How does an ERP system support parallel accounting under HGB and IFRS?
Modern finance modules map parallel accounting via separate ledgers or valuation areas, in which a business transaction is entered once and automatically valued under several standards. In SAP S/4HANA, for example, separate ledgers are defined for each accounting standard and separate depreciation areas in asset accounting, so that depreciation, leasing under IFRS 16 or the treatment of goodwill are calculated separately for HGB and IFRS. Also important are integrated consolidation functions, clean handling of intercompany relationships and a complete audit trail that makes every valuation traceable. If this true multi-standard capability is missing in the general ledger, laborious and audit-critical manual reconciliations arise in subsidiary systems.
How demanding is a transition from HGB to IFRS?
Experience shows that an IFRS transition is considerably more demanding than pure HGB reporting, because more specialist staff, more extensive notes disclosures and deeper audits are required; in the specialist literature, the ongoing costs are sometimes estimated at several times those of comparable HGB financial statements. In addition, HGB individual financial statements must still be maintained in parallel for taxes and distributions, so the workload is effectively doubled. On the benefit side are better access to international capital providers and greater transparency for investors. Whether the transition is worthwhile should therefore be decided through a careful cost-benefit analysis that also considers how it can be mapped in the ERP system.
Are IFRS and US GAAP the same?
No, IFRS and US GAAP are two separate sets of standards, even though both are capital-market-oriented and serve to inform investors. The IFRS are issued by the International Accounting Standards Board (IASB) and are authoritative in the EU for capital-market-oriented consolidated financial statements, while US GAAP comes from the US-American FASB and applies primarily to companies listed in the USA. In substance, the two differ, for instance, in details of revenue recognition, inventory valuation (LIFO is permitted under US GAAP but prohibited under IFRS) and the treatment of development costs. For companies with US exposure, a third valuation framework can therefore become relevant in addition to HGB and IFRS, which further increases the demands on the ERP system's multi-standard capability.