Financial Reporting in Germany: Read this useful guide about the Financial Reporting system and requirements in Germany
The preparation of financial statements for Financial Reporting in Germany is a complex and time-consuming process that requires the use of specialist software, as well as technical and accounting expertise. In this article, we will provide an overview of the key concepts that you need to know in order to understand German financial reporting.
German companies are required to file annual financial statements with the Federal Financial Supervisory Authority (BaFin). These statements must be prepared in accordance with German commercial law and IFRS.
Financial reporting in Germany and types of financial statements.
There are three main types of financial statements in Germany: Bilanz, Erfolgsrechnung, und Finanzierungsbericht.
- The balance sheet is a statement of a company’s financial position at a given point in time, and it includes the assets, liabilities, and equity of the company.
- The income statement is a statement of a company’s income and expenses over a specific period of time, and it shows how profitable the company is.
- The cash flow statement records the movement of cash in and out of a company over a given period of time.
The balance sheet for financial reporting in Germany
The balance sheet is one of the most important financial statements a company produces. It shows a company’s financial position at a specific point in time. The balance sheet is divided into two main parts: assets and liabilities.
Assets are everything a company owns and can use to generate value. Liabilities are everything a company owes. The balance sheet shows the difference between a company’s assets and liabilities: its net worth.
The income statement for financial reporting in Germany
The income statement (Gewinn- und Verlustrechnung) is an important financial statement that shows a company’s profits and losses over a specific period of time. The income statement can be used to track a company’s progress over time and to measure its financial performance.
The income statement is divided into two sections: revenue (Einnahmen) and expenses (Ausgaben). Revenue is the amount of money a company earns from its operations, while expenses are the costs of doing business. The difference between revenue and expenses is the company’s net profit (Gewinn).
The cash flow statement for financial reporting in Germany
The cash flow statement (CFS) is one of the three core financial statements that businesses use to track their financial performance. The other two are the income statement and balance sheet. The CFS tracks a company’s incoming and outgoing cash flow over a specific period of time.
There are three main sections to the CFS: cash flow from operations, cash flow from investing, and cash flow from financing. Each section includes different sources and uses of cash. The goal of the CFS is to give business owners a clear understanding of how much cash they have available and where it is coming from and going to.
Notes to the financial statements required in Germany
An enterprise’s financial statements comprise of a Balance Sheet, an Income Statement, and a Cash Flow Statement. The Balance Sheet shows an enterprise’s assets (what it owns), its liabilities (what it owes), and the difference between the two – the net worth or shareholders’ equity.
The Income Statement measures an enterprise’s income and expenses over a period of time, while the Cash Flow Statement tracks the changes in an enterprise’s cash position over that period.
In Germany, publicly traded companies are required by law to provide additional notes to their financial statements. The notes explain in detail the items that make up the financial statement. This information is important to investors because it helps them understand the company’s financial position and performance.
Auditor’s report requirements for financial reporting in Germany
The auditor’s report is a document that is issued by the auditor of a company. The report contains the findings of the auditor’s examination of the financial statements of the company. The report is addressed to the shareholders of the company and must be made available to them.
The report must include a statement of the auditor’s independence, a description of the scope of the audit, and a description of the auditor’s findings with respect to the financial statements. The report must also include an opinion on the financial statements.
The report must be in German, and must include the following information:
- An overview of the audit and its scope
- The auditor’s opinion on the financial statements
- Details of the auditor’s work, including any significant findings
- The auditor’s opinion on management’s assessment of internal control
Taxes and financial reporting in Germany
There are a few key points to keep in mind when it comes to financial reporting and taxes in Germany:
- Taxpayers are required to file a tax return every year, regardless of income level.
- The filing deadline is 31 May for most taxpayers, though self-employed individuals and those with business income have to file by 31 July.
- Company financial reports must be filed with the local trade registry (Handelsregister) and the tax office.
- The company’s financial year runs from 1 January to 31 December.
Conclusion of Financial Reporting in Germany
In this article, we take a look at the different requirements for the financial reporting in Germany. If you’re doing business in Germany, it’s important to understand these requirements so that you can ensure your financial reports are compliant. We hope this article has been helpful!
To stay up-to-date on the latest news and tips relating to financial reporting in Germany, follow us on social media or browse this website for more articles about accounting and finance in Germany.
If you found this article helpful, please go to the rest of the website for more about accounting in Germany, the general accounting standards, some of the tax reliefs in Germany, audit requirements, an overview of Financial Reporting, understanding the German tax system, or more accounting and financial topics in International Accounting, Audit, Taxation, Accounting Software, Cloud Accounting and Accounting Automation.
Read this article in: English – Dutch – French – German – Spanish
