Wertberichtigungen

Wertberichtigungen are accounting adjustments that reduce the book value of assets to reflect diminished value or expected losses. They are used to bring asset values in the balance sheet in line with realizable amounts and are typically recognized as expenses or as reductions of the asset’s carrying amount in the income statement.

Wertberichtigungen can apply to various asset categories, most commonly to receivables (Forderungen aus Lieferungen und Leistungen) and to inventories. They can take the form of Einzelwertberichtigung, which targets specific items, or Pauschale Wertberichtigung, which applies to groups of assets. In the case of inventories, a Wertberichtigung corresponds to a write-down to net realizable value when the cost exceeds the expected selling price.

Accounting treatment generally involves a contra-asset adjustment. An increase in the value adjustment is recorded by debiting an expense or impairment account and crediting the corresponding Wertberichtigung (a contra-asset). This reduces the net carrying amount of the asset and, depending on the type, lowers current period profit.

In international accounting, IFRS 9 requires an impairment model based on expected credit losses for financial assets, which can lead to different timing and measurement of Wertberichtigungen compared with traditional German practice under the HGB.

Wertberichtigungen are distinct from ordinary depreciation or amortization. They address impairment or credit risk that reduces recoverable value, while depreciation allocates cost systematically over an asset’s useful life. They reflect prudent valuation and aim to present a realistic financial position.