Net principle
The net principle is a principle of economic accounting. With the net principle, asset and liability items in the balance sheet are offset against each other in whole or in part. The same applies to the expense and income items in the income statement .
For smaller joint-stock companies with a balance sheet total of up to DM 3 million and family joint-stock companies with a balance sheet total of up to DM 10 million, the gross principle was waived under certain conditions insofar as the profit and loss account with item 6 ( gross profit / raw expenses ) was broken down according to the meanwhile repealed § 157 aktg para. 1, German Stock Corporation Act could begin AktG 1965 (§ 157 para. 4 AktG 1965). Currently, the net principle applies to small capital companies within the meaning of Section 267a of the Commercial Code , if they make use of the relief under Section 275 (5) of the Commercial Code.
Since the informational value of the annual financial statements becomes less meaningful , the greater the number of netting and the more different the balance sheet or income items offset against each other, the legislature has prohibited such offsetting in the commercial balance sheet ( Section 246 (2 ) HGB ).
Individual evidence
Examples
- Similar expense and income items: rental income / expenses; Interest income / expense
- Items composed of several types of expense and income: sales; Types of effort.
