Balance sheet date
The closing balance concludes the ongoing commercial activity of a company ((1) HGB). These financial statements include the complete summary of all accounting figures at the end of the financial year, including corporate decisions on accounting options and valuation issues. The point in time at which these accounting measures - also retrospectively - are carried out is called the balance sheet date or the balance sheet date. The actual exercise of the accounting options and valuation questions will usually take place after the balance sheet date, but must retrospectively take into account the data applicable at that time. The purpose of the balance sheet date is to determine the profit or loss for the period, which also enables a time series comparison of several consecutive annual financial statements. The balance sheet is therefore a snapshot of the reporting date, while the income statement covers the period of the entire financial year up to the balance sheet date.
Theoretical connections and fundamentals
At the beginning of his trade and for the end of each financial year, the merchant has to draw up a statement (opening balance sheet, balance sheet) showing the relationship between his assets and his debts (Section 242 (1) HGB). In addition to this, the objectification and simplification principles of commercial law must be observed. These include, among other things, the key date principle according to (1) No. 3 HGB, which, in addition to the periodization function, is intended to reduce the scope of discretion and results in the delimitation principle.
The reporting date principle states that all assets available on the reporting date - and only these - are to be accounted for and valued. The value ratios on the reporting date are to be used as a basis. Events that occur after the balance sheet date and cause other financial or value relationships (facts that change the amount or value) may not be taken into account.
The law requires the valuation "on the balance sheet date " (§ 252 Paragraph 1 No. 3 HGB, § 201 Paragraph 2 No. 3 UGB ), whereby so-called "value-enhancing" facts must be taken into account (§ 252 Paragraph 1 No. 4 HGB). This is information that is obtained after the balance sheet date but before the balance sheet is prepared about the objective conditions on the balance sheet date . This applies not only to circumstances that justify or increase a risk, as Section 252 (1) No. 4 1st half-sentence HGB might suggest, but also relieving circumstances that reduce or eliminate the possibility of a loss.
So-called "value-creating" facts are not to be taken into account in the annual financial statements. These are facts that only arose after the balance sheet date and before the balance sheet was drawn up and therefore did not exist on the balance sheet date.
Business, opportunities and risks, income and expenses, assets and debts are not terminated on the balance sheet date, but continue to exist beyond that. From this perspective, the balance sheet date forms an artificial turning point in ongoing business . The affiliation of the income or expenditure to a certain accounting period is therefore decisive for the income calculation. According to Section 252, Paragraph 1, No. 5 of the German Commercial Code (HGB), expenses and income for the financial year must be taken into account in the annual financial statements regardless of the time of payment. In this context, the balance sheet items "active and passive accruals and deferrals " ( Paragraph 2 C or Paragraph 3 D HGB) indicate that the balance sheet date affects current business and therefore values of the applicable accounting period must be allocated to the correct accounting period To be able to determine the profit for the period. These balance sheet items are therefore the means to enforce the delimitation principle. In the case of provisions , the delimitation principle also requires, on the one hand, that the uncertain liability must have arisen before the balance sheet date and, on the other hand, an estimate of the compliance costs that is as accurate as possible must be made. According to the subjective theory of the BFH , a balance sheet is correctly drawn up if it corresponds to the knowledge available at the time it was drawn up about the factual and legal circumstances objectively given on the balance sheet date.
The balance sheet date does not have to coincide with the end of the calendar year ( December 31 ), but this is chosen as the balance sheet date in Germany and around the world. The law only requires that the financial year should not exceed a period of 12 months (Section 240 (2) sentence 2 HGB). A short financial year may be shorter, but not longer than 12 months ( (2) sentence 2 HGB). Therefore, any day of the year can be selected as the balance sheet date. Then it is a "financial year" that differs from the calendar year, which can be selected depending on the industry in order to record typical seasonal developments in the balance sheet. It can then be expedient to choose a balance sheet date that falls on a point in time that takes into account the peak of the season when stocks are largely depleted. However, the balance sheet date once selected must usually be retained due to the principle of balance sheet continuity ; according to Section 252 (1) No. 1 HGB, the opening balance sheet must match the closing balance sheet of the previous year. Exceptions are permitted, for example, when adjusting various balance sheet dates in the group.
Balance sheet date in the group
The consolidated financial statements are to be drawn up on the balance sheet date of the parent company's annual financial statements ( (1) HGB), the financial statements of the group companies included in the consolidated financial statements should be drawn up on the same date as the consolidated financial statements. While the balance sheet date of the group and the parent company must be identical, this need not be the case for the consolidated subsidiaries. However, if the reporting date of a group company is more than three months before the reporting date of the consolidated financial statements, this company must be included in the consolidated financial statements on the basis of interim financial statements prepared for the reporting date and the period of the consolidated financial statements (Section 299 (2) HGB).
Balance sheet preparation
The balance sheet date and the preparation of the balance sheet must not be confused. The balance sheet is usually drawn up or drawn up after the balance sheet date and takes account of the annual financial statements, accounting options, valuation and the “value-enhancing” facts that only occurred after the balance sheet date. This work on preparing the balance sheet often takes weeks or months, depending on the size of the company or its complexity. However, companies do not have unlimited time to prepare the balance sheet. According to board of directors and management , who have to sign it in accordance with German Commercial Code.(1) Sentence 2 HGB, corporations have to prepare the annual financial statements and management report for the previous fiscal year in the first three months of the financial year, small corporations and partnerships were granted a period of 6 months ( (1) Sentence 3 HGB). This period is calculated from the balance sheet date. The preparation of the annual financial statements as of the retrospective balance sheet date is the responsibility of the
The balance sheet date requires an inventory . According to (1) and (2) of the German Commercial Code (HGB), the law therefore assumes that the balance sheet date and the inventory date coincide (inventory date). However, the inventory does not need to be carried out synchronously with the balance sheet date under commercial law or tax law (R 5.4 EStR), but must be carried out no more than 10 days before or after the balance sheet date. It must be ensured that a forward or backward calculation is possible on the exact balance on the balance sheet date . The most precise method for avoiding inventory deficiencies is the balance sheet date inventory. Instead of the inventory on the balance sheet date, so-called proof of value procedures can be selected as an alternative.
Other special features
The balance sheet date is decisive for a large number of other accounting decisions.
- For example, the BFH decided on the problem of the so-called in- phase activation of dividend entitlements that “a corporation that has a majority stake in another corporation cannot activate dividend entitlements from a profit appropriation that has not yet been resolved on the balance sheet date”. Subsidiaries must therefore have decided on the appropriation of profits by their parent company's balance sheet date.
- At the same time, however, results of holdings in partnerships must be taken into account at the same time in accordance with the mirror image theory.
- A mutual contractual relationship that is still aimed at a mutual exchange of services on the balance sheet date is to be treated as a pending transaction . This is usually the case if both contractual partners have not yet started to fulfill their contractual obligations on the balance sheet date or one or both contractual partners have only partially fulfilled them. For delimitation issues, it must be decided on the balance sheet date whether and to what extent pending transactions are to be recorded in the balance sheet.
- Like the fact of the (partial) fulfillment of a claim after the balance sheet date, the later elimination of a risk from a guarantee credit can therefore already lighten its book value on the balance sheet date. This is not a mere “value-influencing” or “value-creating” circumstance of the following financial year. For the "clarifying" evaluation of the balance sheet items to be reported, the end of the balance sheet preparation and thus the day on which the financial statements are signed by the responsible body is decisive. The IFRS do not explicitly recognize such a reference date principle, but it results from numerous individual regulations.
- Hans Adler, Walter Düring, Kurt Schmaltz: Accounting according to international standards , § 252 HGB marg. 42.
- BFH judgment of August 14, 1975 BStBl. II 1976, p. 88.
- Günter Wöhe: Introduction to General Business Administration , 17th edition 1990, p. 1159.
- R 30 para. 1 EStR
- Gottfried Bähr, Wolf F. Fischer-Winkelmann, Stephan List: Bookkeeping and Annual Accounts , 2006, p. 15.
- Gottfried Bähr, Wolf F. Fischer-Winkelmann, Stephan List: Bookkeeping and Annual Accounts , 2006, p. 17.
- BFH decision of August 7, 2000, Federal Tax Gazette. II 2000, p. 632.
- BFH judgment of December 18, 2002 IR 17/02, BFHE 201, 234, BStBl. II 2004, 126, under II.2.
- BFH judgment in BFHE 203, 319, BStBl. II 2003, p. 941.
- BFH judgment in BFHE 109, 55, BStBl. II 1973, p. 485.
- BFH judgment of October 22, 1991 in BFH / NV 1992, p. 449.
- Paul Kirchhof, Hartmut Söhn, Rudolf Mellinghoff: Income Tax Act , § 6 marginal no. A 136.
- Wolfgang Amadeus Dietrich Schlaak: The key date principle in the annual financial statements according to HGB, IFRS ... , 2005, p. 232.