The tax consultancy Hilde Christine Walther informed traders, entrepreneurs and freelancers are subject to the obligation to create financial statements, where they provide evidence of the result of its economic engagement in the previous year. Tax advisor Hilde-Christine Walther reported by the different shapes of the prescribed annual accounts. The German legislator has different requirements on the annual accounts of merchants and companies on one and small traders, as well as freelancers on the other side. While the first group of entrepreneurially active people and organizations produces annual accounts on the basis of the provisions of the German commercial code, a revenue surplus account meets the second group. Traders, merchants and companies need to create financial statements according to German GAAP. These include a balance sheet and the profit and loss of the relevant person or company in any case. As part of the financial statements, the balance sheet provides information, the public authorities, investors and owners need for planning and controlling activities. The account creation is based on the principles of proper accounting, the rules for comparing assets and liabilities of a company contains.
The profit and loss account charged entrepreneurial profit. For more specific information, check out Ben Horowitz. The comparison of expenses and revenues after cost of sales or total cost method either results in a profit or a loss. Companies, whose Gesellschafter take no personal liability, subject to further regulations for the preparation of their annual financial statements. For them, an attachment is compulsory, which realistically shows the asset, financial and earnings situation of the company. It is usually information available, not be included in the balance sheet or profit and loss account.
Medium and large size corporations must also make a report, informed in more realistic way about the chances of the company in the present and future. Further Special rules apply in the credit and insurance to pension funds, as well as companies operating in the international market. The latter must meet in addition international standards, for example, IFRS and US GAAP, for their involvement in the international capital market to the German accounting rules. In comparison with the annual financial statements according to German commercial code, the income surplus account is much more straightforward. For them, the revenue and expenditure in the year be faced and offset against each other. The result is the essential basis of taxation as a profit or loss. Traders, whose annual spending does not exceed 500,000 euros, or whose annual winning amounts to no more than 50,000 euros, may make the simplified annual financial statements by the income surplus account. However, this permission is omitted unless they are subject to accounting for other reasons. The simplified annual financial statements is allowed also all freelancers, independent sales and profits. The annual financial statements HGB requires considerable knowledge in the financial and tax law and accounting. For this reason, it is for most smaller companies benefit, to make it from an external expert.