Accounting
Accounting is
- the information about the situation and development of a company as well as
- the accountability of the use of funds
Persons who perform fiduciary tasks in the broadest sense or who take care of the business of other persons, such as trustees, administrators of residential property ( Section 28 WoEigG ) or supervisors, have to provide information and accountability with the help of the accounting. This is often done by comparing income and expenses.
External accounting , known as accounting, is a branch of accounting . It serves the external accounting addressees as a source of information and decision support as well as documentation and accountability. It can also be used to assess the profit distribution framework and claims, such as the state's tax claims. In contrast to him, internal accounting supports internal decision-makers with self-information and organizational control.
The accounting department provides information with documents, such as the annual financial statements and the management report , which summarize their results. These are created with the help of accounting systems such as bookkeeping . The accounting takes place according to published, generally recognized rules in the form of laws or accounting standards . As far as they regulate the accounting according to double-entry bookkeeping , these are also called accounting law . In order to serve the accounting addressees as a basis for decision-making, it should make statements about past developments, existing assets and future opportunities and risks. In order to increase their credibility, the accounts are often audited by independent auditors.
Goals and addressees
A very important goal of accounting is to inform the accounting addressees. In the case of companies, these are the owners, creditors, employees, suppliers, customers, the state and other stakeholders . Since these are influenced by the economic development of the company, but themselves have little information about the company, the accounting is intended to partially compensate for this information imbalance. Your information should support the addressees in their decisions. In many accounting systems, the information needs of investors , i.e. the owners and creditors of a company, are in the foreground. However, more recent empirical accounting research also emphasizes the importance of external accounting information for internal accounting users, such as the employees of a company.
In addition to providing information, other purposes are often pursued at the same time as accounting. In many countries, for example, it serves to account for management to the owners, to assess the framework for profit distribution and to determine the taxable profit.
Procedure
The accounting department informs its addressees with one or more documents in which financial and other information related to economic activity is presented in summarized form. These are collected and summarized with arithmetic units such as bookkeeping. The three most common methods of collecting, summarizing and presenting financial information are double-entry bookkeeping , cameralistics and the income statement . For larger companies and corporations, double entry bookkeeping is the dominant method. Many larger associations and foundations also use this method. Many small companies and associations use the form of an income statement for their accounting. Numerous corporations under public law use the method of cameralistics for accounting. Others, like some cities and municipalities in Germany, use a form of double-entry bookkeeping. There are numerous variants and designs for each of the three accounting methods mentioned above.
The accounting based on double bookkeeping provides information with the annual financial statements , interim financial statements , consolidated financial statements and the accompanying management reports . Typical components of the three financial statements are the balance sheet , the income statement , the statement of comprehensive income , the cash flow statement , the statement of changes in equity and the notes . Which of these components the respective financial statements contain and whether they are accompanied by a management report depends, among other things, on the size, legal form, sector of the company or organization and on the accounting system used, such as the International Financial Reporting Standards ( IFRS), a national accounting law or a tax law .
The information is determined and summarized with the help of bookkeeping. In addition to accounting, bookkeeping also serves as the basis for internal accounting. In some companies, accounting is the basis for accounting according to several accounting systems. For example, some companies prepare group accounting according to IFRS, individual financial statements according to national accounting law and a tax balance sheet according to tax law.
Invoicing obligation and deadlines
In Germany, the Commercial Code (Section 238 (1) HGB), the Publicity Act and the Tax Code oblige companies to submit accounts. In Austria, companies are required to submit accounts by the company code and the federal tax code . In Switzerland this is done through the Code of Obligations . In Germany and Austria, federal, state and local governments are required to submit accounts through various federal and state laws, such as the municipal regulations of the German federal states. As a rule, the legal representatives of a company, association or corporation under public law are responsible for accounting. Companies are obliged to prepare annual, consolidated or interim financial statements on a specific date, the balance sheet date . The law regulates the deadlines within which the financial statements must be drawn up, checked, presented to the supervisory bodies and published.
exam
Since the accounting officers have much more extensive information at their disposal than the accounting addressees, they must rely on the accuracy of the information provided by them. In order to ensure the accuracy and to increase the credibility of the accounting, it is often checked by independent auditors.
As a rule, companies that are significant due to their size or business activity are legally obliged to have their annual and consolidated financial statements audited by auditors . In addition, the degrees are often checked by other institutions. For example, the German Financial Reporting Enforcement Office and the United States Securities and Exchange Commission (SEC) examine the financial statements of companies listed on US stock exchanges.
The tax authorities check the accounting under tax aspects. This often happens as part of a field audit .
The accounting of German corporations under public law is checked by the auditing offices and in some cases by auditors. In Austria, the municipalities are checked by the municipal examination offices.
Disclosure
Since the general public has an interest in accounting information in major companies, laws and stock exchange regulations in many countries require that these accounting documents be made available to the public. Depending on the content of the regulations, disclosure is made by submitting annual and consolidated financial statements to the commercial register and publishing them in certain media, for example in the German Federal Gazette . Many companies make their consolidated and annual financial statements available in a printed annual report or on their website, often under the Investor Relations section .
Since many users of the financial statements want to analyze the published consolidated and annual financial statements with IT applications, companies around the world are increasingly obliged to publish their financial statements electronically in the form of a specific data format or to make them available to specific addressees of accounting. The XBRL format dominates worldwide , with different taxonomies being defined depending on the accounting system. In Germany, companies can publish their financial statements in the electronic Federal Gazette in XBRL format. According to § 5b EStG, however, you are obliged to submit your tax balance sheet to the tax authorities as an electronic data record in XBRL format (e-balance sheet).
Accounting rules
Disclosure of accounting rules
The type and scope of accounting determine the accounting rules. There are basically two traditions here, which depend on the legal system of the respective countries:
- Case law countries have accounting standards .
- Countries with a Code Law System generally have statutory regulations.
The countries of the first group, for example the USA and Great Britain, have only rudimentary statutory regulations on accounting. The accounting regulations are issued by state-authorized accounting bodies organized under private law. They regulate individual subject areas with a relatively low level of abstraction.
The countries of the second group, for example Germany, Austria, France and Japan, have comprehensively regulated the accounting through legal regulations, which aim to cover as many problems as possible due to their high degree of abstraction.
In order to make corporate accounting internationally comparable, the International Accounting Standards Board (IASB), an accounting body of a US foundation, publishes the International Financial Reporting Standards (IFRS). These accounting standards include the standards of the predecessor organization IASC, are continuously developed and are in the tradition of the United States Generally Accepted Accounting Principles (US-GAAP), which are based on case law . In many countries, these regulations form the basis for accounting by capital market-oriented companies . These are compulsory in the respective countries, as these
- oblige companies to apply IFRS in the form issued by the IASB,
- adapt national accounting regulations to IFRS or
- Approve the individual standards and their changes for use by the company in a recognition process, endorsement process.
In the European Union (EU), capital market-oriented companies have to apply the IFRS for their consolidated financial statements, which were recognized according to the latter procedure.
In addition to the statutory provisions, generally recognized principles must also be observed when preparing the invoice. In Germany and Austria, these include the principles of proper bookkeeping for accounting in accordance with the HGB, some of which have been codified in the HGB.
Accounting regulations for companies in Germany
In Germany, accounting for companies under commercial law is essentially regulated in the third book of the Commercial Code. The accounting regulations there are mandatory for individual financial statements, but not for consolidated financial statements, as shown below. The statutory provisions should regulate the accounting comprehensively, but with a high degree of abstraction. In addition to the regulations that all businesspeople who are subject to accounting must apply, the HGB contains regulations that only apply to certain groups of business people. There are rules for:
- Corporations and partnerships equivalent to them,
- Cooperatives,
- Banks and
- Insurance.
These expand the general regulations to include more extensive information obligations, the restriction of options and special accounting and valuation regulations.
In addition to informing the addressees of the financial statements, German law has other legal consequences linked to the individual financial statements. This defines the framework for the appropriation of profits and, due to the principle of relevance, serves as the basis for the tax balance sheet. Also, the insolvency law builds on the separate financial statements.
In addition to the determination of results according to the double-entry bookkeeping procedure for certain, mostly smaller companies, tax law provides for results determination with the help of an income statement . In the first case, the individual financial statements under commercial law serve as the basis for the tax balance sheet. However, this has to be modified due to numerous tax balance sheet regulations, so that numerous companies prepare their own tax balance sheet based on the trade balance sheet.
As in all other EU countries, consolidated financial statements of capital market-oriented parent companies must be prepared in accordance with the IFRS recognized by the European Commission . All other parent companies that are obliged to prepare consolidated financial statements can choose whether to prepare them in accordance with IFRS or the provisions of the German Commercial Code. For consolidated financial statements, in particular for those prepared in accordance with commercial law, the standards of the German Accounting Standards Committee should be observed. These interpret the accounting rules and fill regulatory gaps.
If companies create separate financial statements according to IFRS in addition to individual financial statements under German accounting law, they can publish these according to Section 325 (2a) HGB instead of financial statements according to German accounting law.
Accounting regulations for companies in Austria
In Austria, essential regulations for commercial accounting are codified in the company code. These regulations are mandatory for individual financial statements. For consolidated financial statements, analogous to the regulation in Germany, capital market-oriented parent companies are obliged to apply IFRS, while all other parent companies can choose between applying IFRS or consolidated financial statements in accordance with the provisions of the Corporate Code.
Austrian accounting law aims to regulate accounting comprehensively with statutory provisions, but with a high degree of abstraction. The content of the accounting and valuation regulations is very similar to the German regulations. The changes to German accounting law made in 2009 with the Accounting Law Modernization Act (BilMoG) have increased the differences to Austrian accounting law.
Accounting regulations for companies in Switzerland
In Switzerland, invoices must generally be submitted in accordance with the Swiss Code of Obligations (OR). Companies that are listed on the Swiss Stock Exchange, the SIX Swiss Exchange , the Domestic Standard and the Standard for Real Estate Companies, as well as issuers who only have debt claims (e.g. bonds) listed, must post their consolidated, annual and interim financial statements prepare the specialist recommendations for accounting (Swiss GAAP FER). These consist of a mandatory framework concept and several standards that are issued by the Foundation's expert committee for specialist recommendations on accounting. In the main segment of the SIX Swiss Exchange, the exchange prescribes accounting according to IFRS or US GAAP.
Analysis of accounting
The published accounting documents contain a lot of information. It is necessary for the accounting addressee to interpret this in terms of his information and decision-making needs. Numerous techniques and methods have been developed by business administration for the analysis of annual and consolidated financial statements . The information within the company's financial statements is analyzed in comparison to its financial statements in other periods and in relation to the financial statements of other companies. In some cases, comparisons with planned or expected values (target / actual comparison) are carried out. Above all, the analysis should make statements about the ability the company had and will have to make payments in the future, what successes it has achieved and what potential it has to achieve successes.
Business subject of investigation
Accounting is a subject of business research and teaching. The term balance sheet theory summarizes studies and discussions about the content and structure of the annual financial statements. In this context, the influence of accounting data on the decision-making behavior of accountants and accounting addressees is an object of investigation. While the formal balance sheet theory explains the content of the balance sheet and income statement, the material balance sheet theory formulates rules for the balance sheet design. It also explains the actual accounting behavior. The results of the business research and discussion have influenced the accounting regulations, also known as accounting law.
literature
- Adolf G. Coenenberg , u. a .: Annual financial statements and annual financial statements analysis: business, commercial, tax and international fundamentals; HGB, IAS / IFRS, US-GAAP, DRS . 22nd edition. Schäffer-Poeschel Verlag , Stuttgart 2012, ISBN 978-3-7910-3182-8 .
- Anton Egger, u. a .: The annual financial statements according to the Corporate Code, Volume 1: The individual financial statements, preparation and analysis . 13th edition. Linde Verlag , Vienna 2010, ISBN 978-3-7073-1782-4 .
- Heinz Kussmaul, u. a .: Municipal Doppik: Introduction to the three-component system . 1st edition. Erich Schmidt Verlag , Berlin 2009, ISBN 978-3-503-11476-4 .
- Bernhard Pellens , u. a .: International accounting: IFRS 1 to 9, IAS 1 to 41, IFRIC interpretations, draft standards. With examples, exercises and case study . 8th edition. Schäffer-Poeschel Verlag , Stuttgart 2011, ISBN 978-3-7910-2938-2 .
- Carl-Christian Freidank : Accounting Policy. An inventory from a commercial and tax law perspective . 1st edition. Springer Verlag , Berlin 1998, ISBN 978-3-540-63914-5 .
Individual evidence
- ↑ btprax: Keyword accounting
- ↑ Bernhard Pellens et al: International Accounting , 2011, page 2
- ^ Draft: Principles of Proper Accounting (Framework Concept) of the DRSC, Item 9 ( Memento of August 24, 2005 in the Internet Archive )
- ↑ Sebastian Holzmann: Employees as addressees of accounting: Empirical analysis of the influence of corporate publicity policy on employee remuneration . 1st edition. Publishing house Dr. Kovac, Hamburg 2019, ISBN 978-3-339-11370-2 ( verlagdrkovac.de [accessed December 8, 2019]).
- ↑ Bernhard Pellens u. a .: International Accounting , 2011, pp. 38–39
- ↑ representation by country, the extent to which corporations or companies are obliged to IFRS accounting on the IASPlus website of Deloitte
- ↑ EU regulation 1606/2002 (PDF)
- ↑ See Lukas Müller / David P. Henry / Peter Barmettler, commentary on Art. 958 OR, in: Dieter Pfaff / Stephan Glanz / Thomas Stenz / Florian Zihler, accounting according to the Code of Obligations, veb.ch Praxiskommentar, Zurich 2014 .
- ↑ Website of the Foundation for Recommendations on Accounting ( Memento from January 21, 2011 in the Internet Archive )
- ^ Coenenberg, et al. a .: Annual accounts and analysis of annual accounts , 2012, p. 1013 ff.
- ^ Coenenberg, et al. a .: Annual accounts and analysis of the annual accounts , 2012, pp. 1239–1240
