Principles of proper accounting

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The principles of proper bookkeeping ( GoB ) are partly written, partly unwritten rules for bookkeeping and accounting , which result primarily from science and practice, jurisprudence and recommendations from business associations. Your task is to protect creditors and company owners from incorrect data, information and possible losses as far as possible.

Accounting requirements

Bookkeeping must be such that it can provide an expert third party with an overview of business transactions and the situation of the company within a reasonable time. Every merchant is obliged to keep books and to make his commercial transactions and the position of his assets visible in these according to the principles of proper bookkeeping, Section 238, Paragraph 1 of the Commercial Code (HGB). Proper accounting includes:

  • The bookkeeping must be clear and concise. This includes:
  • All business transactions must be posted continuously, completely, correctly and in a timely and factually orderly manner.
  • Every booking must be based on a receipt .
  • The accounting documents must be properly stored .

The principles issued by the Federal Ministry of Finance for the proper management and storage of books, records and documents in electronic form as well as for data access (GoBD) substantiate the principles of proper bookkeeping in terms of tax law.

Despite these regulations and although the Commercial Code has also incorporated many important principles, there are still principles that are not legally established (e.g. proper organization). Such rules are called unwritten GoB . The statutory regulations are of particular importance for accounting and valuation in the context of the annual financial statements. However, all, including the unwritten GoB, are binding for the merchant. Incorrect bookkeeping can lead to the taxation bases being estimated by the tax authorities. Incorrect reproduction or concealment of assets in annual financial statements is punishable by imprisonment or fines ( § 331 HGB, § § 370 ff. AO ). In the event of insolvency, violations of the GoB can result in imprisonment or a fine ( Section 283 StGB ).


The legal nature of the GoB is controversial. They are viewed as common law , commercial customs , or traffic views. The GoB can be derived using three different methods:

  • inductive : This method, represented for example by Eugen Schmalenbach , derives the principles from common and established commercial customs of "decent and honorable merchants". It is therefore also called the empirical method. The inductive derivation is only of secondary importance today, as it conflicts with the protective function of the GoB. The merchants are competent, but not neutral; therefore there is a risk that the derivation takes place in the sense of the businessman, but not in the sense of the law.
  • deductive : Here the GoB are derived from the general purposes of bookkeeping and the annual financial statements. The deductive method can be oriented towards business or commercial law. In the first case it follows the generally recognized, uniform business purpose system for accounting , in the second case the principles are derived from the law. They then represent a legally compliant consensus and compromise on the system of objectives intended by the legislature, namely science, jurisprudence and accounting practice. This method is also problematic because there is not just one purpose of the annual financial statements. The deduction basis can therefore only be clearly determined if one of these purposes, such as the measurement of the profit to be distributed, is given priority.
  • hermeneutic : This method interprets the accounting regulations under commercial law by applying criteria of hermeneutics . Important legal criteria here are, for example, the wording of the legal regulations, their context of meaning, their history, legal materials and views of the legislature as well as aspects of the inductive and deductive method. In addition, business aspects and other criteria, such as constitutional conformity and case law, are included and brought into an overall context. The hermeneutic method has established itself and is the common procedure for deriving the principles of proper accounting.

Codified GoB

The following system divides the codified GoB, which must be complied with for bookkeeping, inventory and annual financial statements, into framework, delimitation and supplementary principles.

Framework principles

Principle of correctness and freedom of choice

Legal basis: Section 239 (2) HGB

The principle of correctness is fulfilled if the annual financial statements have been drawn up in accordance with the applicable rules and the approaches and values ​​can be derived from proper documents and books in a verifiable, objective form. The individual items must correspond to the facts and the values ​​must have been determined according to the other GoB. If unavoidable, estimated values ​​are to be determined at your own discretion. These should be as arbitrary and justifiable as possible and consistently applied according to established procedures.

Principle of clarity and clarity

Legal basis: Section 238 (1) sentence 2 HGB, Section 243 (2) HGB

The principle of clarity relates to the external design of the records in the bookkeeping and in the annual financial statements. The annual financial statements should be clear, clear and understandable for expert third parties who are familiar with bookkeeping and annual financial statements. The requirement for clarity is particularly important for the structure of the balance sheet and income statement. The requirements for the level of detail in the structure are not codified. The classification schemes in § 266 HGB (balance sheet) and in § 275 HGB (profit and loss account) provide important information. However, the order and depth of the information required in the appendix , for example, remains open . Significant principles derived from this principle are the principle of individual valuation (assets and debts must be recorded and valued individually, Section 252 (1) No. 3 HGB) and the prohibition of offsetting (asset and liability items as well as expenses and income may not be offset against each other , Section 246 (2) HGB).

Principle of individual assessment

Legal basis: Section 252 (1) No. 3 HGB, Section 201 (2) line 3 UGB

The principle of individual valuation states that all assets and debts must be valued independently of one another. The individual valuation should in particular exclude compensation for increases in value in the case of one object with decreases in value in another. In some cases, however, the problem arises of having to decide what counts as an independent asset.

There are a number of exceptions to the principle of individual assessment:

  • According to Section 240 (3) of the German Commercial Code (HGB), property, plant and equipment as well as raw materials, consumables and supplies, if they are regularly replaced and their total value is of subordinate importance to the company, may be valued at a constant amount and value, provided that they are in stock (...) is only subject to minor changes.
  • In accordance with Section 240 (4) of the German Commercial Code (HGB), similar items of inventory as well as other similar (...) assets and debts may each be combined into a group and reported at the weighted average. In this context, general valuation adjustments for receivables and general valuation of provisions are of particular importance.
  • According to Section 256 of the German Commercial Code (HGB), it can be assumed for the valuation of similar inventory assets that the assets acquired or manufactured first have been used or sold first or in some other specific sequence.

Principle of completeness

Legal basis: § 239 Paragraph 2 HGB, § 246 Paragraph 1 HGB

In accordance with the principle of completeness, all business transactions requiring posting must be recorded in the annual financial statements. In addition, such changes must be recorded in the accounting and the annual financial statements that are not recognizable as business transactions, such as B. Shrinkage and spoilage. In addition to incidents that require accounting, risks that have not yet been reflected in the accounting by the balance sheet date must also be taken into account ( provision ).

In this respect, the requirement for completeness includes:

  • annual recording of the actual stocks through inventory
  • intensive price monitoring on the markets in order to take negative price developments into account
  • Observation and analysis of all relevant risks in order to be able to take them into account in the annual financial statements.

Principle of value enhancement

Legal basis: § 252 Paragraph 1 No. 4 HGB

The increase in value regulates how information affects the annual financial statements that the merchant only becomes aware of after the balance sheet date. It is to be differentiated:

  • Increase in value : If an issue occurred before the balance sheet date, but only becomes known after the balance sheet date and before the balance sheet is drawn up. This must be taken into account in the balance sheet for the old year.
  • Reason for value : If information is received about facts that only occurred after the balance sheet date, this may no longer be taken into account in the balance sheet.

Delimitation principles

Realization principle

Legal basis: Section 252 (1) No. 4 HGB, Section 201 (2) line 4 UGB

The realization principle codified in Section 252 (1) No. 4 HGB - in addition to the imparity principle - states that profits may only be taken into account if they are realized on the balance sheet date (losses, however, are to be taken into account when they are foreseeable due to the imparity principle ). Since the profit or loss corresponds to the difference between the acquisition / production costs and the selling price, the time at which the profit is realized and the time at which the sales proceeds are taken into account are congruent.

Imparity principle

Legal basis: Section 252 (1) No. 4 HGB, Section 201 (2) line 4 UGB

The imparity principle calls for the unequal treatment of profits and losses for reasons of precaution and the protection of creditors. While increases in the value of an asset are only taken into account at the time of realization, decreases in value must be assessed when they are threatened with a sufficiently high probability (loss anticipation). Examples of potential losses from pending transactions (see provisions ) or depreciation of assets (see also the lowest value principle ) can be cited here.

Principle of factual and temporal delimitation

Legal basis: for temporal delimitation: § 252 Paragraph 1 No. 5 HGB, § 201 Paragraph 2 Z. 5 UGB

The principle of factual delimitation is closely related to the realization principle. It defines the period in which the impairments caused by the provision of the service are to be recognized as an expense and thus to be recognized as reducing profit. All expenses objectively attributable to the company's performance are to be allocated to the period to which the objectively related income is allocated, regardless of when the payment was made.

  • Example: If a company purchases materials that will only be processed into products and sold in the next year, then the expenses for these materials will only become expenses in the next year.

The time demarcation principle solves several problems. On the one hand, according to this principle, changes in assets are strictly period-related, such as For example, rental income and expenses, interest income and expenses or insurance premiums should be allocated proportionally to the period in which they were caused and not in the period in which the payment was made.

  • Example: The company receives a rental payment on October 1st, 2005 for the following 6 months. Half of the rent payment is allocated to 2005 and half to 2006.

On the other hand, the principle of time delimitation clarifies the attribution of changes in value that are not matched by corporate services (e.g. donations or currency losses or gains). Changes in value are added to the period in which they occur.

Changes in assets that only become known when the period to which they are actually attributable has already been completed are attributable to the period in which they become known.

Supplementary principles (system principles)

Principle of caution

Legal basis: Section 252 (1) No. 4 HGB, Section 201 (2) line 4 UGB

Due to the paramount role of creditor protection in German commercial law , the principle of prudence is of great importance. According to the principle of caution, if there is uncertainty about the size of a value, the most likely value or a mean value should not be used, but a somewhat more pessimistic value (ADS, accounting and auditing of companies, 6th edition, § 252 HGB, item 68). In operational practice, the principle of caution is often used to create hidden reserves . Excessive depreciation on an asset leads to a lower book value. According to the prevailing opinion, the laying of hidden reserves is information-distorting and therefore neither in the interest of the creditors nor (due to the associated lower profit statement) the owners of the company.

Principle of continuity

Legal basis: Section 252 (1) No. 1 HGB, Section 201 (2) line 6 UGB

The development of the company can only be identified from information about the asset, financial and earnings position of a company at different points in time if this information is comparable. Frequent changes in reporting and valuation methods can have an arbitrary influence on the balance sheet and income statement. When it comes to continuity, a distinction is made between material and formal continuity:

  • The material continuity requires that the individual items in the annual financial statements are always determined, delimited and compiled in the same way. In relation to the assessment ( Section 252, Paragraph 1, No. 6 of the German Commercial Code), this is a reference provision in German law that can be deviated from, if necessary, with justification ( Section 252, Paragraph 2 of the HGB). In the Austrian UGB, the principle is a mandatory requirement, however, in the last sentence of Section 201 UBG, a departure (from all provisions of Section 201) is permitted due to the existence of special circumstances.
  • The formal continuity stipulates that the same structural terms and schemes must always be used. In the opening balance sheet , the values ​​for a financial year must be identical to the values ​​used in the closing balance sheet for the previous year. This creates the basic requirement for comparability , both over time and between different companies at the same time.

Exceptions are the euro changeover, in which the closing balances of the previous year were shown in DM and the opening balances of the current year were shown in euros. Another exception arises after a tax audit, according to which the last still changeable balance sheet must be adjusted in the event of changes, while the previous year's balance sheet is no longer touched.

Changes in terms of material or formal continuity must be mentioned and their effects explained.

Going concern principle

Legal basis: Section 252 Paragraph 1 No. 2 HGB, Section 201 Paragraph 2 Item 2 UGB

The going concern principle (continuation principle) arises from the requirement for comparability of information in the annual financial statements, the principle of correctness and freedom from arbitrariness, and the realization principle. According to this, when assessing the assets and debts in the annual financial statements, it must be assumed that the company will continue to operate beyond the balance sheet date ( Section 252 (1) No. 2 HGB).

Periodization principle

Legal basis: § 252 Paragraph 1 No. 5 HGB

Income for the respective period (usually the financial year) must be compared with the corresponding expenses.

Due date principle

Legal basis: Section 252 (1) No. 3 HGB, Section 201 (2) line 3 UGB

The assets and debts are to be valued individually on the balance sheet date, sales, expenses and income are to be delimited on the balance sheet date .

Relationship between commercial law and tax law GoB

Due to the relevance of the commercial balance sheet for the tax balance sheet ( Section 5, Paragraph 1 of the Income Tax Act), the GoB under commercial and tax law must represent a single unit ( principle of relevance ), apart from exceptional cases. This principle of relevance requires that the BFH generally interpret all GoB against the background of commercial law; this interpretation should be made regardless of tax consequences, even if the case is of a tax nature.

Furthermore, commercial law and tax law GoB form a unit, because they must meet the requirement of uniformity of the jurisdiction of the highest courts of law. This requirement means that a legal norm of a supreme court is to be interpreted uniformly in different areas of law (Article 95.3 of the Basic Law).

Principles of proper accounting in Switzerland

The principles of proper accounting under Swiss law are contained in Art. 958c of the Code of Obligations . It is essential to adhere to three principles:

  • The completeness of the annual accounts
  • The clarity and materiality of the information
  • The principle of caution

Deviations from three other principles are permitted in justified cases, but must be explained in the appendix :

  • Principle of the continuation of business activities (see Art. 958b OR)
  • Consistency in presentation and evaluation (cf. Art. 958c Para. 1 Item 6 OR)
  • Inadmissibility of offsetting assets and liabilities as well as expenses and income (cf. Art. 958c para. 1 item 7 OR)

The principles of proper bookkeeping are contained in Art. 957a OR: The following must be observed in particular:

  1. the complete, truthful and systematic recording of business transactions and facts;
  2. proof of receipt for the individual booking processes;
  3. the clarity;
  4. the expediency with regard to the type and size of the company;
  5. the verifiability.

Furthermore, Art. 958c (2) OR (principles of proper accounting) contains a principle of proper bookkeeping:

  • "The existence of the individual items in the balance sheet and in the notes must be proven by means of an inventory or in some other way."

Principles of proper accounting in Austria

  1. truth
  2. clarity
  3. completeness
  4. Due date principle
  5. Realization principle
  6. Imparity principle
  7. continuity
  8. Attention
  9. Individual evaluation
  10. Activation prohibition for self-created intangible assets / original goodwill

The GoB are codified in §§ 190 ff UGB.

See also


  • Adolf G. Coenenberg , u. a .: Annual financial statements and annual financial statements analysis . 21st edition. Schäffer-Poeschel Verlag, Stuttgart 2009, ISBN 3-7910-2770-0 .
  • Ulrich Döring , Rainer Buchholz: Bookkeeping and annual accounts . 9th completely revised and supplemented edition. Erich Schmidt Verlag, Berlin 2005, ISBN 3-503-08379-0 , XIV.
  • Anton Egger, Helmut Samer, Romuald Bertl: The annual financial statements according to the Corporate Code , Volume 1 - The individual financial statements . 12th revised and expanded edition. Linde, Vienna 2008, ISBN 978-3-7073-1402-1 .
  • Heinrich Wilhelm Kruse: Principles of proper accounting. Legal nature and purpose . 3rd unchanged edition. Otto Schmidt Verlag, Cologne 1978, ISBN 3-504-35003-2 .
  • Ulrich Leffson: The principles of proper bookkeeping . 7th revised and expanded edition. IDW-Verlag, Düsseldorf 1987, ISBN 3-8021-0318-1 .
  • Thomas Schildbach: The annual financial statements under commercial law . 8th updated edition. Verlag Neue Wirtschafts-Briefe, Herne / Berlin 2008, ISBN 978-3-482-42487-8 .

Individual evidence

  1. ^ Schmolke, Deitermann: Industrial accounting IKR. 34th edition. Winklers Verlag, 2006, ISBN 3-8045-6652-9 , p. 11.
  2. ^ Klaus Ruhnke: Accounting according to IFRS and HGB. 2nd Edition. Schäffer-Poeschel Verlag, Stuttgart 2008, ISBN 978-3-7910-2744-9 , pp. 185 ff.
  3. See Lukas Müller / David P. Henry / Peter Barmettler, commentary on Art. 958c OR, in: Dieter Pfaff / Stephan Glanz / Thomas Stenz / Florian Zihler, accounting according to the Code of Obligations, Praxiskommentar, Zurich 2014 .
  4. See Lukas Müller / David P. Henry / Peter Barmettler, commentary on Art. 958b OR, in: Dieter Pfaff / Stephan Glanz / Thomas Stenz / Florian Zihler, accounting according to the Code of Obligations, Praxiskommentar, Zurich 2014 .