Maturity congruence

In business administration, congruence of deadlines is the congruence of the deadlines for tied up capital and capital transfer of assets and liabilities in a company's balance sheet .

General

The starting point was Otto Hübner , who in his two-volume work “The Banks” (1854) demanded complete congruence of deadlines with the golden banking rule in banking management . “If the bank receives funds deposited for three months, it cannot safely borrow them for six months”. This strict correspondence between the terms and maturities of assets and debts does not entail any liquidity risks - this is what Hübner saw as the danger.

In 1948, voices in business administration now also demanded that the useful life of an asset component and the term during which the capital used to cover it ( equity and / or borrowed capital ) must match. The somewhat complicated doctrine read: "There must be agreement between the duration of the commitment of the assets, i.e. the duration of the individual capital requirement, and the duration during which the capital used to cover the capital requirement is available". This is based on the idea that, for example, the borrowed capital tied up in a machine should only be due at a point in time when the accumulated depreciation amounts are sufficient for full repayment when the machine leaves the company . In the case of investment loans , the loan term is therefore set parallel to the intended useful life of the investment. If all accounting processes are congruent, there will be no long-term liquidity problems; according to Erich Gutenberg , the company is in financial equilibrium in the form of the golden rule of finance . He pointed out that financial equilibrium would keep the company going. The repayment date of a liability is then not before the release of the asset item financed with it.

detection

When examining the long-term balance sheet items, first of all, equity is compared with fixed assets in “coverage ratio A” (also asset coverage ratio I) . This golden rule of accounting is

${\displaystyle {\frac {\text{Eigenkapital}}{\text{Anlagevermögen}}}\geq 1}$

This key figure for asset coverage ratio I states that the long-term fixed assets of the fixed assets should be fully financed by equity. In the manufacturing sector, the target quota for coverage ratio A is between 50% and 70%.

"Coverage ratio B" (also asset coverage ratio II, asset coverage ratio) shows the ratio of long-term available capital to fixed assets.

${\displaystyle {\frac {{\text{Eigenkapital}}+{\text{langfristiges Fremdkapital}}}{\text{Anlagevermögen}}}\geq 1}$

This is used to determine the extent to which the principle of investment financing with matching maturities has been complied with.

Compliance with both coverage ratios logically means that current assets must also be covered by short-term liabilities .

These are horizontal financing rules because they relate asset items to liability items on the balance sheet. Here are stock variables compared, which only have static significance. Dynamic flow quantities lead to the following comparison:

${\displaystyle {\frac {\text{langfristige Kapitalbeschaffung}}{\text{langfristige Vermögensverwendung}}}\geq 1}$

consequences

The postulate of matching deadlines must be consistently enforced down to the individual transaction. In the opinion of the BFH, risk exclusion through matching maturities can only be ensured if the remaining terms of the underlying transaction and the hedging transaction (such as derivatives ) are identical. If one position is due earlier than the other, there is no correlation with the sequence of price risks .

If coverage ratio B is below 100%, parts of the fixed assets are financed by short-term borrowed capital with the risk that follow-up refinancing will not succeed or other alternative capital releases will not be possible. Strict adherence to these rules, on the other hand, formally secures corporate liquidity. When viewed dynamically, however, the actual capital commitment periods and capital lease periods differ from the balance sheet due to the reference date . Machines or receivables may fail unexpectedly, inventories may be stored longer than expected, planned follow-up refinancing or loan extensions may not be realized. If the maturity congruence is adhered to, there is at least a certain probability that financial equilibrium will also exist for the future.

See also

• Funding rules
• Sediment theory
• Maturity transformation

Individual evidence

1. ↑ Otto Hübner, Die Banken , 1854, p. 28.
2. ↑ Hans Töndury / Emil Gsell , Financing - Capital in Business Administration , 1948, p. 37 ff.
3. ↑ Erich Gutenberg, Fundamentals of Business Administration , Volume 3, The Finances, 1969, pp. 277 ff.
4. ↑ Erich Gutenberg, Fundamentals of Business Administration , Volume 3, The Finances, 1969, p. 280.
5. ↑ Bernd Heesen / Wolfgang Gruber, Balance Sheet Analysis and Key Figures , 2011, p. 156.
6. ↑ Jörg Wöltje, Key Financial Figures and Company Valuation , 2012, p. 52.
7. ↑ Martin Bösch, Finanzwirtschaft , 2011, p. 417.
8. ^ Alfred Christiansen, individual assessment, DStR 2003, p. 266.