Personal contribution

from Wikipedia, the free encyclopedia

Own work are those of a company provided services in connection with the manufacture or repair their own systems have emerged.

General

Many companies have the technical and / or professional expertise , their own operational assets such as machinery , buildings or vehicles of assets to create or even to wait . You do not then have to commission external companies, but use your own employees and your own material for this .

Accounting

Since neither the employees nor the material for the actual production process are available when manufacturing your own plant , the Commercial Code (HGB) requires a strict separation of this work from the actual production process. This separation takes place both in the balance sheet and in the income statement .

  • Balance :
    • Property , plant and equipment created or repaired in-house must be capitalized . For this purpose, the balance sheet item is to be selected in which the self-produced or repaired object is to be found, for example “A.II.2 Tangible assets: technical systems and machines” ( Section 266, Paragraph 2 HGB). The own work capitalized is to be listed separately here, the related production costs are to be shown as "own work capitalized" in property, plant and equipment as an addition (capitalization obligation).
    • Internally generated intangible assets ( development costs ) can be capitalized; they can but do not have to be activated ( Section 248 (2) sentence 1 HGB). If they are activated, the balance sheet item “AI1. Self-created industrial property rights and similar rights and values ​​”( Section 266 (2) HGB). According to Section 255 (2a) of the German Commercial Code (HGB), all development costs of self-created intangible assets are to be capitalized as production costs. The justification for the law makes it clear that the concept of intangible assets is to be understood broadly. This can include materials, products, protected rights or unprotected know-how and services.
  • Profit and loss account : The use of employees and material for personal work causes personnel and material costs that are not part of the actual production process. For this reason, Section 275, Paragraph 2, No. 3 of the German Commercial Code (HGB) provides for the total cost method that these costs must be neutralized again by the income item “Other own work capitalized”. As a result, the operating result is corrected by processes that have nothing to do with the actual performance of the service. Without correction, the operating result would be worse (lower profit or higher loss). Internally generated intangible assets (development costs) can be capitalized; they can but do not have to be activated ( Section 248 (2) sentence 1 HGB). According to Section 255 (2a) of the German Commercial Code (HGB), all development costs of self-created intangible assets are to be capitalized as production costs. The justification for the law makes it clear that the concept of intangible assets is to be understood broadly. This can include materials, products, protected rights or unprotected know-how and services. On the other hand, brands, print titles, publishing rights, customer lists and comparable self-created intangible assets that have not been acquired for consideration may not be capitalized according to Section 248 No. 4 HGB and therefore do not lead to personal contributions.

The presentation in the income statement looks like this: 

    Umsatzerlöse
    + / - Erhöhung oder Verminderung des Bestands an fertigen und unfertigen Erzeugnissen 
    + andere aktivierte Eigenleistungen
    + sonstige betriebliche Erträge
    = Gesamtleistung

If internally generated intangible assets are capitalized, this leads to an increase in profits. The profit shares resulting from capitalization are subject to a distribution block in accordance with Section 268 (8) HGB.

International regulation

Capitalized costs are called international English Own work capitalized (OWC) . They are to be listed in accordance with IAS 1.28 if they are material and in accordance with IAS 38.54 they can be capitalized as development costs if a newly developed product or process can be clearly defined, is technically feasible and is intended either for own use or for marketing. In addition, it is assumed that there is a sufficient probability that the development expenditure will be covered by future income.

Individual evidence

  1. ↑ Bundestag printed paper 16/10067 of July 30, 2008, p. 60
  2. ↑ Bundestag printed paper 16/10067 of July 30, 2008, p. 60