Corporate structures are a good thing from a civil and tax point of view, because they make it possible to combine tax advantages from different countries. At the same time, different standards for the preparation of the balance sheet apply in every country of the world. The magic word here is “international IFRS accounting”, with the abbreviation for “International Financial Reporting Standards”. The aim of IFRS accounting is to make companies from different countries comparable with each other.
The basis of international accounting are the so-called IFRS, in English "international standards of accounting". They are based on Article 4 of EU Regulation 1606 from 2002 and provide a uniform framework for accounting. The aim behind it is to standardise annual accounts so that corporations in several countries are comparable with each other.
Without separate standards for international accounting, investors would have to know the respective accounting rules of the individual countries. Subsequently, a reassignment or conversion of the respective items to the balance sheet and profit and loss account would be required.
At first glance something surprising: The standards themselves are issued by a registered association, the International Accounting Standards Board (IASB). The EU or national legislators “cast” the proposals into their respective regulations and laws after appropriate examination.
In principle, domestic groups can decide for themselves whether to prepare their balance sheet in accordance with the provisions of the HGB (§§ from 290) or in accordance with the standards of international accounting, whereby an obligation to prepare it in accordance with German commercial law always applies.
An option to account additionally in accordance with IFRS exists for groups without listing on the stock exchange, i.e. if their shares are not tradable on the capital market. So-called capital market-oriented companies, where the parent group is located in Germany, are obliged to account for in addition to the HGB also in accordance with IFRS standards. As a result, two (required) balance sheets are required.
The rules of international accounting affect:
This article does not replace tax or legal advice in an individual case. Facts, current law, jurisdiction, documentation and implementation remain decisive.