Splitting success

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Success split is in the business administration which made for a particular purpose breakdown of the profit and loss account of a company and examines its success sources .

General

The profit and loss account consists of a large number of items that contain a wide variety of income , cost types and expenses . The end result of these items is the annual surplus or net loss . In order to determine the cause of this end result, the controller (for internal company purposes) or balance sheet analyst (for external balance sheet analysis ) must appropriately link, omit or reclassify various items. This activity and its result are called splitting success.

The most important criteria for splitting the results of these expenditure and income figures are operational, durability and period-related. The operational- relatedness relates to the items to be derived from the operational purpose , the durability relates to permanent, regularly recurring or ordinary items, while the period-relatedness leads to a distinction between period-related and non-periodic or aperiodic expenses and income.

species

A distinction is made between business, commercial and international profit sharing. The division of profit under commercial law and international income takes into account the national legal requirements for accounting in a country.

The split in success began in the specialist literature in 1928 with Hermann Richter's dissertation and referred to non-banks , but has now also established itself in the year-end analysis of universal banks .

Classic splits in success

The operating result reflects the result of the operational provision of services from the core business of a company. It is determined within the cost and performance accounting:

    Umsatzerlöse 
    +/- Bestandsveränderungen 
    + aktivierte Eigenleistungen
    + sonstige betriebliche Erträge
    - Materialaufwand
    - Personalaufwand
    - Abschreibungen
    - sonstige betriebliche Aufwendungen
    = Betriebsergebnis (operatives Ergebnis)

The next level in the split is EBIT :

   Betriebsergebnis
   + Zuschreibungen zum Anlagevermögen
   + Erträge aus Finanzanlagen
   = EBIT

The following is the interest result , which is made up of interest income and interest expenses:

    Zinsaufwand
    - Zinserträge
    = Zinsergebnis

Interest expense is primarily interest on loans ( debit interest ) and interest expense from other liabilities . Interest income arises, for example, through credit interest from bank balances or interest from securities .

The financial result consists of the operating result, the interest result and other items:

   Betriebsergebnis
   +/- Zinsergebnis
   + Erträge aus Beteiligungen
   - Verluste aus Beteiligungen
   - Abschreibungen auf Finanzanlagen und übliche Abschreibungen auf Wertpapiere des Umlaufvermögens
  = Finanzergebnis

The financial result, which takes into account the operating result, is identical to the result from ordinary business activities .

Aperiodic components of the operating result and neutral, i.e. non-operational items, are to be assigned to the extraordinary result. They are usually not exactly recognizable for external analysts due to the incomplete information available . In this case they should be treated imparity :

  • Other operating income is entirely extraordinary.
  • Other operating expenses are completely orderly, since from the perspective of the German Commercial Code (HGB), in accordance with the principle of prudence, all expected expenses must be recognized on the day they are identified.

Since 2003 there have been considerable obstacles to recognizing these items from the annual financial statements.

Obstacles to splitting success

The deletion of the item "Profit from operations" (earnings; English results of operating activities ) in 2003 founded the IASB in IAS 1.BC12 so that the profit from operations in IAS 1 is not defined and defined the reporting of not Positions cannot be demanded. In addition, the operating result as well as the result of ordinary business activities have ceased to exist as an intermediate figure in the income statement from December 2005 due to the Accounting Directive Implementation Act (Section 275 (2) No. 14 HGB old version ). Neutral expenses (former item 15), neutral income (former item 16) and neutral result (former item 17) are no longer shown and therefore hinder the external profit split.

International

The IASB has refrained from defining the operating result, which is why its disclosure is not required in IAS 1 (IAS 1.91, 1.92), but may be published voluntarily. A split in profit in the traditional sense is only possible to a limited extent according to the IFRS regulations, the principle of profit splitting in the income statement is unknown to IFRS.

Individual evidence

  1. Ingrid Lühr, International Accounting for Small and Medium-Sized Enterprises , 2010, p. 153
  2. ^ Karlheinz Küting / Claus-Peter Weber, balance sheet analysis , 2006, p. 238
  3. Lorenz Fleischhauer, The split in success before and after BilRUG , 2016, p. 5
  4. Hermann Richter, The problem of the split in success , in: ZfhF 22nd year, 1928, pp. 139–230
  5. Michael Pfauter, The Splitting of Success Your Problem, illustrated using the example of a machine tool factory , 1931, p. 1
  6. Herbert Bäsch, Analysis of the annual financial statements at universal banks, 1992, p. 297 ff.
  7. Janina Bogajewskaja, Reporting Financial Performance , 2007, p. 200
  8. Carsten Theile, Exercise Book IFRS , 2007, p. 221
  9. Henning Zülch , The IASB Improvement Project: Significant innovations and their effects , in: Journal for international and capital market-oriented accounting, 2004, p. 154