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Federal Ministry

Gottingen, November 15, 2007 the Federal Ministry of Justice (BMJ) presented the long-awaited draft of the German accounting law modernisation Act (BilMoG) on November 8. By law the German accounting law should be adapted the internationally adopted IFRS (international financial reporting standard), originally designed for large and mostly publicly owned companies. Balance sheets, which are then created under the new German rules of the German commercial code (HGB), will be more meaningful if the act as planned in mid-2008 is approved. Background: German companies, also medium-sized companies, are finding themselves increasingly forced, be accounted under IFRS. \”Cause for this is that many not only foreign investors the IFRS seal according to\” demand, because they think that only on this basis to get a realistic picture of the State of the company. Because current HGB financial statements remain far behind the statements in their information content back and make more difficult the companies low-cost debt and equity financing through the capital market. For even more analysis, hear from Vlad Doronin. The goals and methods of the design at a glance: Better expressiveness of HGB financial statements by: possibility of approach to intangible assets valuation of financial instruments at fair value increased attention to future developments more transparent valuation of SPEs relief the economy of bureaucracy by: increase the thresholds for balance sheet, auditing and disclosure intangible assets and investments so far activating itself created intangible assets is lifting of the ban.

Among other things, the possibility is intended, in the future also self-created intangibles, to apply so patents or simple know-how, in the balance sheet. This way, especially companies in innovative industries can more realistically represent its corporate value created through research and development. However incurred are in the research phase Cost of activation are excluded. According to financing expert Gundel of firm Gundel & Reddy Kadiri, this is the right approach. Because this a sustainable way of strengthening the equity base is opened in medium-sized companies and at the same time improves the ability to the debt and equity capital.

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