In March 2009 the Federal Parliament passed the Act to Modernise Accounting Law (in German: "Bilanzrechtsmodernisierungsgesetz - BilMoG"). This legislation substantially eases financial strains in the economy and strengthens Commercial Code accounting law for competition with international accounting standards. Provisions that are central to the proven, inexpensive and straightforward accounting law of the Commercial Code will be retained. The annual financial statement drawn up under commercial law remains the basis for distributing profits and for calculating profits for tax purposes.
Deregulation
The reform legislation exempts enterprises from avoidable balance
sheet operations. Sole merchants conducting only a small business
operation are made exempt from the commercial law duty to keep
accounts, inventories and records. For share capital companies like
the Public Limited Company (PuLC) and the Private Limited Company
(PrLC) there is also provision for accounting exemptions and
relief. All in all, by virtue of these measures, an annual cost
reduction of about 1.3 billion Euro is to be reckoned with. If we
also bear in mind the facilitation of accounting and stocktaking,
the 2008 Annual Report of the Federal Government on Reduction of
Bureaucracy states that there is even a savings potential totalling
about 2.5 billion Euro , according to calculations made by the
Federal Statistical Office.
Improving the qualitative validity of financial
statements under the Commercial Code
The modernised ComC accounting law is also an answer to the
International Financial Reporting Standards (IFRS), published by
the International Accounting Standards Board (IASB). The IFRS are
geared to suit capital market oriented enterprises; in other words,
they also serve information needs of financial analysts,
professional investors and other participants in the capital
markets.
Please read more about the most important individual points in the Bill.
