Cancellation of approach and evaluation options
Approval and valuation options are understood to mean rights that are granted to an accounting company to choose between two or more values.
|Expense provisions||There is no longer any option for you to reserve expenses for maintenance if this is made up for within a fiscal year. This is regulated in Section 249, Paragraph 1, Clause 3 of the old version of the German Commercial Code. In addition, the option to create provisions for other expenses has also been abolished. This is regulated in Section 249 (2) of the old version of the German Commercial Code.|
|Differentiation of consumption taxes and customs duties||There is no option to accrue excise taxes or customs duties taken into account as expenses with the help of an active prepaid expenses item . This applies if these are valid as assets to be reported within the inventory on the balance sheet date. Regulated in Section 250, Paragraph 1, Clause 2, No. 1 of the old version of the German Commercial Code (HGB)|
|Sales tax accrual||The option regarding the delimitation of the sales tax taken into account as an expense does not apply . This applies to down payments to be reported on the balance sheet date or openly deducted from inventories. Regulated under Section 250 Paragraph 1 Clause 2 No. 2 HGB old version|
|Depreciation||After the reform, the option to make depreciation due to future fluctuations in value is no longer available (Section 253, Paragraph 3, Clause 3 of the old version of the German Commercial Code). Depreciation based on a reasonable commercial assessment is also no longer possible (Section 253 (4) HGB old version)|
|Evaluation simplification procedure||The following evaluations are no longer possible:
In § 256 sentence 1 HGB new version only the FIFO (“first in – first out”) and the so-called Lifo procedure (“last in – first out”) still exist.
|Deferred taxes||Before that, the timing concept, also known as the P&L-oriented concept, always applied. The BilMoG has replaced this with the internationally used tempo concept, a balance sheet-oriented concept. This means that the tax deferral is no longer based on differences that result from a different periodization of expenses and income that are determined as a result when determining the annual net income under commercial law in relation to the taxable profit determination. Rather, the differences that arise from the calculation of the different valuations in the tax and commercial balance sheet are decisive . These now have a tax burden or tax relief.|
Changes in relation to the rating
Here, too, there were changes after the reform. The BilMoG provides for the following changes:
Valuation of financial instruments at market value
This change is mainly based on experiences from the financial crisis. Financial instruments such as stocks, fund shares or bonds must be valued by banks and credit institutions on the balance sheet date with the so-called fair value.
After the reform, you must set provisions with the necessary settlement amount. This is regulated in Section 253 (1) sentence 2 of the new version of the German Commercial Code (HGB). Specifically, this means that when evaluating provisions, all future price and cost increases must be taken into account. In addition, provisions must be discounted in accordance with Section 253. Paragraph 2 of the new version of the German Commercial Code (HGB).
256a HGB new version regulates that the conversion of assets and liabilities denominated in foreign currencies must be carried out at the so-called spot exchange rate. This is basically in line with currency conversion, which is already a common practice in practice.
Changes to the balance sheet structure
According to ETAIZHOU, the Accounting Law Modernization Act has also brought two major changes to the structure of the balance sheet. This applies to both the assets and the liabilities side .
- Active side: On the active side, since the modernization under AI1. Identify “self-created industrial property rights and similar rights and values” right at the front. This is regulated in Section 266 (2) HGB new version. According to the BilMoG, it is now possible, as already described above , to capitalize internally generated intangible assets from fixed assets in the amount of the development costs that have arisen.
- Liabilities side: If there are own acquired shares, the nominal amount of these is to be deducted from the item “ subscribed capital ” as a capital repayment on the liabilities side. The difference between the nominal amount and the cost of the own shares is to be offset against the freely available reserves. Thus, the BilMoG created a new regulation, which concerns the recording in the trade balance of own shares.
What are the advantages of the BilMoG?
BilMoG has some advantages, especially for you as a small or medium-sized entrepreneur. The advantages are easy to understand and clear at a glance.
|Advantages at a glance|
With BilMoG, the most extensive revision of the HGB has been created since 1986. Through this modernization, a clear approximation to the IFRS could be achieved. The law repeals that there is a ban on development costs. Options that no longer corresponded to the times were abolished and a basis for a new and, above all, realistic assessment could be found for provisions. The trade balance is still the basis for calculating profits for tax purposes. The large number of changes made it possible to bring the trade balance closer to the tax balance sheet.