What is good accounting policy

Prof. Dr. Heribert Anzinger, Prof. Dr. Nadine Antonakopoulos

cc1) Accounting purposes (internal system)

Item 98

Under the impression of the competition between two competing accounting systems, the system of the principles of proper accounting is correctly described in the literature with a dual purpose. The information and distribution limitation functions are compared. The equality of both purposes is considered in the literature as an essential feature of the annual accounts GoB.[231] If one tries to expand the accounting purposes for the derivation of individual GoB, it is helpful to differentiate further. A distinction can be made in the internal system of commercial accounting law according to BiRiLiG and BilMoG with different functions, six accounting purposes of the commercial law principles of proper accounting. They can be derived from the history, the system and the purpose of accounting under commercial law:

  1. Self-information of the businessman and company management
  2. documentation
  3. Accountability
  4. Distribution limits and capital maintenance
  5. Distribution of profits
  6. Capital market information

Item 99

The annual financial statements are first and foremost an instrument of good corporate governance. It helps to identify risks and opportunities for the company at an early stage.[232] A reflex of this duty is to protect owners and creditors from the risk of bankruptcy. The accounting regulations under commercial law force the entrepreneur to obtain a legally pre-structured overview of his assets, financial and earnings position, which also enables him to compare with other companies (self-information purpose).

Item 100

In addition, the annual financial statements also serve an independent documentation purpose for external third parties. This third-party information purpose is expressed for bookkeeping in Section 238, Paragraph 1, Clauses 2 and 3 of the German Commercial Code (HGB). And the balance sheet should also document the asset, financial and earnings position in such a way that a third party, e.g. B. in bankruptcy, can get an overview at any time.[233] The purpose of the documentation is ultimately clearly reflected in the storage and submission obligations of §§ 257–261 HGB, which in addition to the entrepreneur, the shareholders and capital market participants also include third parties, e.g. B. Identify heirs (§ 260 HGB) as the information addressees of the year-end.

Item 101

The accounting purpose of the annual financial statements results from the general obligation to account for the management of third-party property interests, as fundamentally regulated in Section 666 of the German Civil Code (BGB). With regard to the annual financial statements, it can be found in the provisions in accordance with Section 242, Paragraph 1, Clause 1 and Paragraph 2 of the German Commercial Code (HGB). An obligation to prepare annual financial statements showing the relationship between assets, debts, expenses and income is accountability for the company's success in the past financial year.[234] With the archetypes of the commercial partnership, Commenda and Quirad, the importance of accountability for German commercial accounting law can also be explored historically. A characteristic of these early forms of company that shaped the development of commercial balance sheet law was the division of labor between investors and managers, as is particularly evident today in the limited partnership typical of the law. The commendatore accepted capital entrusted to him, tried to increase it through trade and had to give an account after the deal had been concluded. The financiers had the right to check the accounts and to take back or reinvest the capital contribution increased by the profits and decreased by the losses.[235] Naturally, this concept of accountability always comes into play where ownership and control diverge.[236] This is regularly the case with partnerships and corporations, but not with sole proprietorships, which is why Section 241a of the German Commercial Code and Section 242 (4) of the German Commercial Code (HGB) can only provide for a size-dependent exemption from the accounting obligation. The stricter accounting regulations for corporations and, at the same time, size-dependent gradations of accountability through accounting can be justified with a different need for accountability.[237]

If one extends the goal of accountability and the group of accountable addressees beyond the beneficiaries to all persons interested in the company and extends the object of accountability to forecasts for the future, the accountability and information function dissolve.[238]

Item 102

Several central characteristics of German commercial accounting law are expressed in the distribution limitation and capital maintenance function. The capital preservation regulations under company law presuppose rules for determining assets and determining profits, from which the part of equity that is not subject to the tying up of assets is ...

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