Balance sheet approach
The legal term balance sheet referred to in the German Commercial Code for the accounting the valuation for positions in the balance sheet on the asset side and the liability side . It is not legally defined , but is used by the legislator, in particular in Section 6 (1) No. 2a EStG and Section 49 (2) InvStG .
Which balance sheet approach is chosen results from the legal valuation standards . In the HGB , the principle of balance sheet caution applies , so that assets are valued (= to be recognized) according to the lowest value principle and debts are to be valued according to the highest value principle . The valuation in the tax balance sheet can deviate from this because the principle of relevance in the balance sheet approach only applies to a limited extent. The balance sheet preparer can make use of activation options and passivation options .
In other legal circles, the balance sheet approach is based u. a. according to the IASB or US-GAAP .
