Settlement amount (Engl. Settlement value ) is in the Accounting Law of the rating scale for liabilities and reserves and is the amount by which a prepare their accounts debtor a liability at their due date to meet has.
The specific legal term of the settlement amount only applies to liabilities . Here, the settlement amount represents a measurement standard with the help of which the amount of liabilities on their due date is determined. The Accounting Law Modernization Act of May 2009 introduced the concept of the settlement amount for liabilities and provisions, after the repayment amount was previously decisive for liabilities. This clarification should ensure that only the liabilities incurred with a previous payment of money flow can be repaid as benefit in kind and property value obligations to the debtor fulfill are. Accordingly, the settlement amount represents the amount that has to be raised (in the case of debts) or likely (in the case of provisions) to meet the liability.
A distinction must be made between the settlement amount and liabilities and provisions.
- Liabilities : In the case of payment obligations (such as supplier credits , bank loans ), the settlement amount corresponds to the repayment amount. This arises from invoices , contracts or other agreements with a creditor that establish a debt . In the case of foreign currency liabilities , the settlement amount corresponds to the amount that must be raised in the local currency in order to be able to settle the liability in foreign currency . In the case of obligations in kind and in kind (in the form of services or the delivery of assets ), the settlement amount corresponds to the obligation valued in money to provide certain services or property. The amount of the settlement amount is certain for liabilities.
- Provisions : The uncertainty about their existence or their amount requires an estimate of the settlement amount based on a reasonable commercial assessment (Section 253 (1) sentence 2 HGB). The expected settlement amount is to be estimated on the basis of the circumstances on the balance sheet date . In the case of long-term obligations (> 1 year), price and cost increases must be taken into account in the settlement amount. Provisions with a term of more than one year are to be discounted in accordance with Section 253, Paragraph 2, Clause 1 of the German Commercial Code . To determine the present value of the settlement amount of the provision is the discount rate (market interest rate after IAS 37.47) at the closing date are discounted . In special cases, the liabilities on which the provisions are based can contain an interest component in addition to the settlement amount; this must be calculated from the fulfillment amount in accordance with the general rule that only fulfillment amounts are to be recognized as a liability . In the case of guarantee provisions, the amount to be paid does not exceed the replacement costs for a replacement product; in the case of provisions for pensions , future wage and salary increases must be taken into account in the amount to be paid. The settlement amount includes the amount required on a balance sheet date with which a pension obligation can be met, taking into account interest and compound interest ; it represents the financial mathematical present value of a cash flow.
The IAS use the term settlement value for liabilities , while realizable value is used for assets . According to IAS F.100 (c), the settlement amount is the amount of a non-discounted liability that is expected to be used to settle the obligation at the time of repayment in the ordinary course of business.
- Adolf G. Coenenberg: Annual accounts and analysis of the annual accounts , 21st edition, Stuttgart, 2009.