geringwertige

Geringwertige, in practice abbreviated as GWG from the term Geringwertige Wirtschaftsgüter, refers to assets with a low acquisition cost that can be expensed immediately in the year of purchase under German accounting and tax law. The concept aims to simplify bookkeeping by allowing a one-year deduction for small-value tangible assets used in business operations.

The GWG regime applies to movable, tangible assets used for business purposes, such as small tools, office equipment, or other consumable items. If an asset falls below the applicable threshold, it can be written off entirely in the purchase year rather than depreciated over several years. Items above the threshold are generally capitalized and depreciated according to standard rules. In addition, there are optional pooling provisions (often referred to as a GWG pool or Sammelposten) that allow groups of mid-value items to be depreciated over a fixed period, rather than individually in the year of purchase. The exact thresholds and pool rules have evolved and vary by statute, so current law should be consulted for precise applicability.

GWG treatment affects both tax calculations and financial reporting. It does not apply to land or buildings, nor to assets that are primarily used for private purposes or mixed-use scenarios without proper apportionment. Anti-abuse provisions exist to prevent improper classification of expenditures.

Etymology and usage: the term combines “geringwertig” (low-value) with “Wirtschaftsgut” (economic good). In German accounting practice, GWG is a common topic in guides and manuals, reflecting a balance between administrative efficiency and accurate asset representation.