Balance sheet identity
In accounting, the balance sheet identity is understood to be the accounting principle in accordance with Section 252 (1) No. 1 of the German Commercial Code ( HGB) , which prescribes that the values for the company's fixed and current assets in the opening balance sheet must not deviate from those in the closing balance sheet of the previous year.
This double-edged balance sheet is intended to prevent companies from reporting incorrect profits.
A breach of the balance sheet identity is only permitted in justified exceptional cases, Section 252 (2) HGB.