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Reserves ( english reserves ) are in business or other body of persons in the accounting components of equity that neither issued capital , retained earnings brought forward more than net income reported and either are accounted for on separate reserve accounts ( disclosed reserves ) or in the financial statements are not visible ( hidden reserves ). While the reserves are attributable to equity, the provisions are borrowed capital .


Open reserves are shown separately from “subscribed capital” on the liabilities side of the balance sheet and are variable parts of equity; they are variable with regard to the appropriation of profit or the purpose ( Section 272 (3) sentence 2, (4) HGB , Section 150 AktG ). The subscribed capital, on the other hand, is constant and is not subject to any changes, apart from the rare capital increases and decreases . Because they are part of the equity capital, they are additional liability capital which, in the event of a loss, is drawn on before the subscribed capital to cover losses.

The formation of reserves is only required for corporations , which is why some of these reserves are also referred to as “statutory reserves”. In the case of commercial partnerships, on the other hand, the formation of reserves is not provided for by law, is not required due to the unlimited personal liability of certain shareholders and is not operationally possible.


The various types of open reserves are not provided for by law for all legal forms.

  • Reserves in corporations ( Section 266 III A. II and III HGB) are capital reserves, retained earnings and other reserves. There are no longer reserves for own shares in Germany, as own shares are to be deducted from the subscribed capital according to § 272 Abs. 1a HGB and thus the actual capital reduction is expressed.
  • Reserves for cooperatives : The cooperative must create statutory reserves ("reserve funds") to offset losses arising from the balance sheet. The amount and type of education are to be specified in the articles of association ( Section 7 GenG ). A part of the annual surplus must be added to the statutory reserves and the minimum amount of the reserves must be determined, until the amount is reached, the allocation must be made. The reserves are of particular importance for the financing of the cooperative. Resigning members (exceptions in Section 73, Paragraph 3 GenG) are not entitled to a share in the reserves, which is why the cooperative has capital available in the reserves that cannot be withdrawn from it (in contrast to the business credit).
  • Reserves in partnerships : usually not shown because such appropriations of profits are transferred directly to the deposit accounts. In the case of partnerships, there are therefore variable equity accounts. The variable equity components in corporations are therefore the reserve accounts.
  • Until 2009, tax-free reserves could be created for all types of companies as special items with a reserve component, in particular as replacement procurement reserve, reserve for grants for the acquisition or production of fixed assets or reserves for the promotion of small and medium-sized businesses ( Section 7g (1 ) EStG ; savings reserve). By BilMoG in connection with the reverse were authoritativeness standing commercial law ( § 247 para. 3, § 254 , § 270 para. 1 sentence 2, § 273 , § 279 para. 2, § 280 para. 2, § 281 and Section 285 sentence 1 no. 5 HGB old version). According to Art. 66 (5) EGHGB, special items with a reserve portion could last be formed in the annual financial statements under commercial law for the financial year beginning before January 1, 2010, and valuations based on depreciation only permitted for tax purposes were transferred to the commercial balance sheet.
  • In addition to the statutory reserves further to revenue reserves are formed ( § 337 HGB).
  • Revaluation reserves : arise from the difference between the lower acquisition or production costs and the revaluation of assets as part of the subsequent valuation. According to Art. 33 of the Fourth EC Directive , the member states can allow or require companies to revalue certain assets or at their replacement value with no effect on income, whichtake into accountthe effects of inflation on the items shown in the balance sheet. During the transformation of the EC directive into German law, this provision was waived, but German companies are still allowed to use it if theyapply IAS 16.39.
  • Currency reserves result from the consolidation of foreign subsidiaries with a foreign currency reference. The expenses and income shown by these are converted at the annual average exchange rate, so that the exchange rate differences compared to the exchange rate on the balance sheet date may be shown as currency reserves with no effect on income (reduced by the deferred taxes applicable) (IAS 21.30).

Other forms of reserve are provided for banks , in particular the reserve for general banking risks in accordance with Section 340g of the German Commercial Code.


Open reserves are identifiable as such from the annual financial statements (i.e. "disclosed") and arise, among other things, from the non-distribution of profits generated ( retained earnings ), income from capital measures or additional payments by shareholders or from book profits in the case of capital reductions.


Legal Reserves

In Section 150 (1) AktG, the law stipulates for AG and KGaA that a statutory reserve must be set up in the balance sheet, in which 5% of the annual net income, possibly reduced by a loss carryforward from the previous year, is to be set until this reserve is included of the capital reserve (according to Section 272 (2) No. 1 to 3 HGB) reaches 10% of the share capital ( Section 150 (2) AktG). The prerequisite for the mandatory formation of a legal reserve is that an annual surplus has been generated; if losses were generated, it does not have to be endowed. The revenue reserves exceeding 10% are so-called "free reserves" which are not subject to any binding effect and can therefore be used in particular for dividend payments in the event of a weak earnings situation ( dividend continuity ).

Other retained earnings

As revenue reserves (liabilities side: A. III), only amounts may be shown that were formed from the result in the financial year or in an earlier financial year. These include statutory reserves or reserves based on articles of association or articles of association and other retained earnings. Revenue reserves are taxed reserves as they are already subject to corporation tax . If the articles of association or the articles of association prescribe the creation of revenue reserves from the annual financial statements, they must be reported as statutory reserves ( Section 58 (4) AktG, Section 29 (1) GmbHG ). The other revenue reserves contain all amounts that are neither statutory nor statutory reserves ( Section 272 (3) AktG). The income statement ends in accordance with Section 275 (2) and (3) of the German Commercial Code (HGB) with the item net income / net loss as the balance of all expenses and income. According to the will of the law, transactions in the appropriation of profits may only be shown after the annual surplus / annual deficit as a change in capital and revenue reserves according to Section 275 (4) HGB. This applies to all types of reserves, as they represent an appropriation of earnings; this is expressly regulated for the AG and KGaA in Section 158 of the AktG.

Capital reserve

A capital reserve is formed in accordance with Section 272 (2) of the German Commercial Code

  • on the issue of shares ( company shares , shares including preference shares or other shares), if these were issued above par . In accordance with Section 272, Paragraph 2, No. 1, No. 3 of the German Commercial Code, the premium is to be included in the capital reserve;
  • on the issue of or convertible bonds , Section 272 (2) No. 2 HGB;
  • in the case of other payments by the shareholders that do not provide a specific consideration and also do not have to be repaid, Section 272 (2) No. 4 of the German Commercial Code (HGB).

Capital reserves are the only reserves that are added to the company from outside; All other types of reserves represent internal financing . Additions to the capital reserve must be made when the balance sheet is drawn up ( Section 270 (1) HGB). For the AG there is a disclosure requirement in the appendix ( Section 152 (2) AktG). A premium is a prerequisite for the allocation to the capital reserves when shares are issued; if shares are issued at nominal value (“par”) or below nominal value ( prohibited in the case of shares in accordance with Section 9 AktG), no capital reserve can be formed. The capital reserves at the GmbH also include the counterpart for requested additional payments in accordance with Section 42 (2) GmbHG.

identification card

The structure of Section 266 of the HGB provides for a strict separation of the various equity components. A separate disclosure of capital and revenue reserves is required for the reserves. The latter are in turn divided into the legal reserve, reserve for own shares, statutory reserves and other revenue reserves. According to Section 152 (2) and (3) AktG, stock corporations must state the development of their reserves in the balance sheet or in the notes. This regulation applies to all reserves, so it makes sense to keep a reserve analysis in which the status of the previous year, the annual surplus or deficit, the adjustments and withdrawals of the individual reserve types and the new status on the reference date are noted, from which one Movement can be seen.


Under accounting law, the release of reserves is only permitted in a few cases. In the case of stock corporations, revenue reserves may under certain conditions only be used to compensate for an annual deficit or loss carryforward from the previous year ( Section 150 (3) and (4) AktG); this also applies to withdrawals from the capital reserve ( Section 150 (3) and (4) AktG). The main reason for the formation of the reserves can be seen from this narrow purpose. Reserves serve as a reserve for losses incurred and must compensate for them until the reserves are used up; only then may the share capital be used as a loss reservoir. Insofar as a GmbH shows capital reserves, they can freely dispose of them. The transfer to or release of revenue reserves, the release of capital reserves and the distribution to shareholders represent an appropriation of profits ( Section 158 (1) AktG). The capital reserve must be released when the balance sheet is drawn up ( Section 270 (1) HGB). For the AG there is a disclosure requirement in the appendix ( Section 152 (2) AktG).

In Section 275 (4) of the German Commercial Code (HGB), it is expressly stipulated that the release of reserves must only be shown after the item “Annual surplus” ( Section 275 (2) no. 20 and (3) no. 19 HGB as the result of the income statement).


According to Section 207 AktG, reserves can be converted into subscribed capital by resolution of the general meeting . This is done technically by the issue of bonus shares . Specifically, the law provides that “other revenue reserves” can be converted in full; the statutory reserve and capital reserves, however, only if they exceed 10% of the share capital ( Section 208 (1) AktG). It is a capital increase that becomes effective after entry in the commercial register ( Section 211 AktG).

Profit transfer agreements

If there is a profit transfer agreement , only annual surpluses that have been generated may be transferred to the beneficiary parent company. Because Section 275 (4) of the German Commercial Code (HGB) stipulates that the release of reserves must only be reported after the item “Annual surplus” ( Section 275 (2) no. 20 and (3) no. 19 HGB as the result of the profit and loss account). This means that the release of reserves is subject to a transfer ban in profit transfer agreements. An exception to this is provided for in Section 301 sentence 2 AktG in the event that amounts have been allocated to other revenue reserves during the term of the profit transfer agreement. The law wants to create an incentive not to transfer all profits accrued during the contract period, but rather to store them in reserves. However, this exception only applies to retained earnings and not to additions to capital reserves. It cannot be transferred to capital reserves either by way of a so-called teleological reduction or by analogy. Both the unambiguous wording of the law and the purpose of the regulation speak against this.


Reserves serve different purposes. They are available to the company in particular to absorb unexpected or extraordinary losses, to improve the company's financial resources, to positively influence the capital structure (key figure analysis) of the company or to ensure an even distribution of profits (dividend continuity) to the shareholders (distribution of profits as well in low-income or loss-making years). If dividends are financed in whole or in part from the release of reserves, only the free reserves may be used for this purpose.

Special items with an equity portion

Until 2009, due to tax regulations, corporations and partnerships were also allowed to set up certain tax-free reserves in the commercial balance sheet, which were to be booked as special items with a reserve portion, provided they were shown in the tax balance sheet. With the BilMoG, this controversial and non-systematic part of German accounting law was abolished and the reverse relevance repealed. The concept of the reverse relevance referred to the regulation of § 5 Abs. 1 S. 2 EStG old version, according to which tax options were to be exercised in the determination of profits in accordance with the annual financial statements under commercial law. The opening clauses under commercial law in Section 247 (3) and Section 254 of the old version of the German Commercial Code ( HGB, old version) enabled the disclosure of untaxed reserves and the inclusion of valuations in the commercial balance sheet that were based on depreciation only permitted for tax purposes. For corporations and partnerships, according to Section 264a of the German Commercial Code (HGB), the opening clauses were limited by Sections 273, 279 (2) and Section 280 (2) of the old version of the German Commercial Code (HGB) to circumstances in which a consistent accounting in the commercial balance sheet was a prerequisite for their tax recognition. The special items with an equity portion may no longer be newly formed since January 1, 2010; a transitional arrangement has been created for existing special items.

Tax-privileged associations of persons

The activities of associations and foundations are tax-privileged under certain conditions, whereby these associations of persons are required to use funds promptly. A use is deemed to be timely "if the funds are used for tax-privileged or statutory purposes at the latest in the two calendar or financial years following the inflow" ( Section 55 (1) No. 5 AO). An exception to this is contained in Section 62 (1) AO, which allows the formation of reserves, i.e. the withdrawal of funds from the timely use of funds. According to Section 62 (1) No. 1 AO, reserves are permitted if and to the extent that they are necessary so that the tax-privileged corporation can sustainably fulfill its statutory purposes. Special-purpose reserves can be set up for purposefully relevant purchases or replacements (vehicles, IT systems, buildings), maintenance (roof repairs in your own building) or taxes that require corresponding savings and for which there are already specific timeframes. In contrast to the special-purpose reserves, the use of free reserves is not stipulated either in terms of time or content ( Section 62 No. 3 AO). They are general components of the assets of the tax-privileged corporation and can be used permanently to build up assets. However, their formation is limited to a maximum of one third of the surplus and, in addition, to a maximum of 10% of their other funds to be used promptly in accordance with Section 55 (1) No. 5 AO.

Local budget law

Every municipality has to keep a budget . The budget year is the calendar year . An overview of the status of the reserves must be attached to the budget (see budget regulations of the federal states). General reserves and special reserves are to be shown separately in this overview. If the administrative budget has more income than expenditure, the surplus must be added to the asset budget to compensate for this . If the asset budget also has more income than expenditure, the difference to its balance must be added to the general reserve. The general reserve is a "collective reserve". This reserve has the following purposes:

  • Ensuring the timely performance of expenses
  • Accumulation of funds to cover the expenditure needs in the property budget
  • Loan repayment
  • Balancing the administrative budget

The municipal equity is divided into four items according to § 41 Paragraph 4 GemHVO, namely the general reserve , special reserves (§ 43 Paragraph 4 GemHVO), compensation reserve and annual surplus / annual deficit . The general reserve is the residual value of the equity position.


IAS 1.6 writes a minimum breakdown by subscribed capital ( English capital subscribed ) and reserves ( English capital reserves ) before. This is to the capital reserve ( english additional paid-in capital ), suggesting what IAS 1.86. According to IAS 1.73 (e), a separate disclosure of subscribed capital, capital reserves and other reserves is permissible; IAS 1.79 requires a separation between retained earnings and capital reserves.

See also

Web links

Wiktionary: reserve  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. R 6.6 EStR
  2. R 6.5 EStR
  3. adopted on July 25, 1978
  4. Edgar Löw (Ed.), Accounting for banks according to IFRS , 2005, p. 188
  5. Bruno Kropff in Geßler / Hefermehl / Eckardt / Kropff, Aktiengesetz , § 301 margin no. 18 with reference to the reasons for the law
  6. OLG Frankfurt NZG 2000, 603, 604