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DEFINITION OF 'HANDELSGESETZBUCH (HGB)' | Information 2019 - What is it?


  Handelsgesetzbuch (HGB) is the law which operates the main trade code for the companies in Germany. The law includes the regulation connected with preparation of financial statements. This law is similar to GAAP which is followed in the United States.

2019 - Handelsgesetzbuch (HGB)

Handelsgesetzbuch (HGB), Information - 2019

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DESTRUCTION OF 'HANDELSGESETZBUCH (HGB)' | Information 2019 - What is it?


  On May 10, 1897 at first the trade code of Germany known as Handelsgesetzbuch was established. In 1998 the code was adapted to correspond to new laws in the European community. HGB was also used in Austria with 1938. In 2007 HGB in Austria it was replaced with newer integrated trade code called Unternehmensgesetzbuch (UGB).

  The German accounting law was updated further in 2010 with Bilanzrechtsmodernisierungsgesetz (BilMoG).

As Handelsgesetzbuch is applied to the companies

  HGB includes management on registration of companies in Germany and resolutions to which they have to adhere. For example, HGB includes conditions on use of commercial brokers, agents and formation and dissolution of cooperation with the third parties. Mandates of HGB include payment of salaries of employees by the end of every month. According to the law, don't compete, points in the contract for hiring of employees have to be in writing. There are also conditions of rather charter contracts for courts and rescue the rights.

  The trade code of Germany and accounting laws share similarities and distinctions with  International Financial Reporting Standards (IFRS). For example, laws and IFRS of Germany use both historical expenses as an accounting kernel, but the law of Germany usually doesn't allow revaluation. IFRS allow revaluation of objective cost of property, intangible assets, investment property, the equipment and inventions within set industries. The German accounting law offers some exceptions to an assessment of objective cost of financial instruments from banks and financial institutions which are carried out for trade.

  Profit and loss reports are generally similar under any set of accounting laws, but distinctions really exist. There is no statement of the comprehensive income at the German methods of the account. Profit and loss reports can be issued by means of costs of methods of a total cost or sale. Besides, the income delayed from discounting of conditions has to be included with other interest and the similar income.

  With IFRS the company can decide to show the income or expenses as the only statement of the comprehensive income or as two statements. Separate statements can show components of profit or loss plus other statement for other income.

  HGB only demands the statement of streams of cash for the consolidated financial otchetnost and for publicly sold companies which aren't obliged consolidated financial the reporting of the file. IFRS and the German practice of the reporting also classify cash streams, working, investments and financial activity.


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