Interim profit

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Interim profit is

  • the profit generated within a group through the exchange of services between the group companies. A group profit only arises when group services leave the group. With regard to the realization principle , the unit theory requires that profits from deliveries by group companies can only be taken into account in profit or loss if the recipient of the delivery is no longer a group company. This is taken into account by § 304 , § 310 Paragraph 2 HGB in conjunction with § 292a HGB through the obligation to eliminate intercompany profits . For reasons of economic efficiency, the legislature has largely limited the elimination of intercompany profits to current assets; In the case of fixed assets, elimination is only necessary if these were not acquired within the group in accordance with the customary market practice. The elimination of interim profits means a correction of the group equity . In many cases, it is customary to offset the interim profits against the balance sheet result.
The IAS / IFRS deal with this topic in IFRS 10.B86, "Consolidation procedures". Based on the basic consolidation procedure, a summary statement is created by adding the individual financial statements of the parent company and the subsidiaries. Minorities in the capital are shown per acquisition. After the capital consolidation , all intra-group balances, transactions, profits and expenses are eliminated in full (debt consolidation, elimination of expenses and income, elimination of intercompany profits). There is no longer any distinction between minority or majority shares in profit or profit reserves (also referred to as unit theory 2).
  • the interest and interest claims contained in the price of an investment unit . The interim profit was subject to the final withholding tax up to and including 2017 . Until then, the fund company had to separately determine and publish the part of the increase in earnings that resulted from interest income and interest claims as interim profit on each trading day. The buyer of investment units was able to deduct the interim profit paid as a negative income, while the seller had to tax the interim profit received as capital income.
As of January 1, 2018, the separate calculation and taxation of interim profits was abolished with the new Investment Tax Act.