Bilanzrecht

Bilanzrecht refers to the body of law governing the preparation and presentation of financial statements. In Germany, the primary sources of Bilanzrecht are the German Commercial Code (Handelsgesetzbuch or HGB) and the German Corporate Tax Act (Körperschaftsteuergesetz or KStG). It dictates how companies must record their assets, liabilities, equity, revenues, and expenses, aiming to provide a true and fair view of their financial position and performance.

The core principles of Bilanzrecht include prudence, continuity of business, and historical cost. Prudence, or the principle of conservatism, requires that potential losses be recognized immediately, while potential gains are only recognized when realized. The continuity principle assumes that the business will continue to operate in the foreseeable future, influencing how assets are valued. Historical cost dictates that assets are generally recorded at their original purchase price, though depreciation and impairment rules allow for adjustments over time.

Bilanzrecht serves multiple purposes. For external stakeholders like investors, creditors, and tax authorities, it provides essential information for decision-making. For internal management, it offers a basis for strategic planning and performance evaluation. The rules ensure comparability between different companies and across different accounting periods, fostering transparency in the financial markets. Compliance with Bilanzrecht is crucial for legal reasons and to maintain stakeholder trust.