An Introduction to the German Accountancy System

All you need - and not too much

Wolf-Dieter Schellin

• Publisher: Books on Demand
• Year: 2020
• Print ISBN: 9783751980043
• eBook ISBN: 9783752613452
• Edition: 2
• Topic: Negocios y empresa
• Subtopic: Negocios internacionales

For many professionals who learn about the German accounting system, it can seem daunting and confusing. This book will help you to understand the accounting records of German companies and be able to evaluate the information that you are presented. The author also gives insight into German tax laws, as well as provide explanations for the most forms of enterprise. You will also be given access to the main tax forms used as well as instructions for completing them.All current legislative changes (including those of 2020) have been taken into account in this second edition.

The Balance Sheet

The balance sheet is a comparison between the value of the assets and liabilities in so-called “Kontenform”.

The property is shown on the left-hand side of the balance sheet, subdivided by fixed assets and current assets. It represents the assets in the workflow.

The capital is shown on the right-hand side of the balance sheet, subdivided by shareholders' equity and liabilities. It represents the liabilities in the workflow.

Always apply the equations

Assets = Capital

and

Equity = assets – liabilities

Balance Sheet to

31.12.20..

Assets	Liabilities
Fixed assets	Shareholders' Equity
Current Assets	Liabilities
Assets	Capital

The design - the layout of the balance sheet

The structure, or the layout of the balance sheet is not at the discretion of the company. Since the legislator rules, that a "qualified third person" has to be able to get an overview of the situation of the respective company within a reasonable time (→ Proper accounting principles; Page →).

In other words, in the case of a tax audit of your business by the surely competent tax authority, the examiner must be able to get an overview of the figures quickly.

Also if you apply for a loan from your bank, it must be possible for the bank, to get an overview over your creditworthiness with the help of the balance sheet figures.

Changes in the values of the balance sheet

Each business transaction has an impact on the items in the balance sheet and in a double way. Even though not every business transaction is shown in the balance sheet, we can expect four possible changes of values:

• Change in assets = Replacement on assets
• Change in liabilities = Replacement on liabilities
• Increase in ass. + liab.= Both sides increase
• Reduction in ass. + liab. = Reduce both sides

A more secure way to identify the respective change of values, is a step-by-step approach to answer the following questions:

• Which positions are affected?
• On which side of the balance sheet do you find the account?
• How does the value of the balance sheet change?
• What is the change called?

Business Operation	Which position will be affected?	On which side of the balance sheet is the account?	How the value does of the balance sheet change?	What do you call this balance sheet change?
Cash payments made to the bank account	Bank cash	assets assets	increase reduction	asset swap
Conversion of a supplier- debt into a loan-debt	authentic- a...

Table of contents

• Disclaimer
• Acknowledgements
• Table of Contents
• Definition of the "accountancy"
• Basics of Financial Accounting
• Legislation
• Requirement after the commercial law
• The "books" of the accounting
• Examples of “subsidiary ledger”
• Proper accounting principles
• Stocktaking and Inventory
• Stocktaking Types
• The Inventory
• The shareholders' equity and its determination
• The Balance Sheet
• Book on assets and liabilities accounts
• The composite posting record
• Opening balance and final balance
• Profit and loss accounts
• Value Added Tax
• Tax rates
• Value added tax on input
• Import Sales Tax
• Annual Tax Declaration
• Intra-community trade
• Procurement costs
• Calculation of the funding benefit
• Returns
• Discounts at the point of sale
• Fixed assets
• Depreciation Methods
• Low-value assets
• Wages and salaries
• Annual Financial Statements
• Deferrals and accruals
• Deferred income
• Provisions
• Layout of the balance sheet according to (HGB)
• Sales tax return
• Form of „Annual Tax Declaration“
• Index
• About the Book and the author
• Weitere Informationen
• Photo credits
• Useful Links
• Copyright