World closure principle
The world financial statement principle is a principle of group accounting . According to this, all subsidiaries for which there are no inclusion options or inclusion bans, regardless of their country of domicile, are to be fully consolidated in a consolidated financial statement . The global accounting principle is part of most accounting systems, for example the International Financial Reporting Standards ( IAS 27 ), the German and Austrian accounting regulations ( Section 294 (1) HGB ; Section 247 UGB ), and US GAAP . In Germany it was introduced by the Accounting Directive Act of 1985.
Observance of the global financial statement principle helps ensure that consolidated financial statements are complete and that the assets, financial and earnings position of the group can be correctly represented. If subsidiaries were excluded solely because their registered office is in a certain country, the consolidated financial statements could be manipulated through legal transactions between the subsidiaries included and the excluded subsidiaries.
Consolidated financial statements that have been prepared in accordance with the world financial statement principle are referred to as world financial statements or, for simplicity, also as world balance sheet.
literature
- Jörg Baetge , Hans-Jürgen Kirsch , Stefan Thiele: Consolidated Balance Sheets , 9th Edition, IDW Publishing House, Düsseldorf 2011, ISBN 978-3802118210
- Karlheinz Küting, Claus-Peter Weber: The consolidated financial statements: Practice of group accounting in accordance with HGB and IFRS , 12th edition, Schäffer-Poeschel Verlag , Stuttgart 2010, ISBN 3791029886