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Extent of IFRS applicationStatusAdditional Information
IFRS Accounting Standards are required for domestic public companies All domestic companies whose securities trade in a regulated market are required to use IFRS Standards as adopted by the EU in their consolidated financial statements.
IFRS Accounting Standards are permitted but not required for domestic public companies
IFRS Accounting Standards are required or permitted for listings by foreign companies IFRS Standards as adopted by the EU are required in their consolidated financial statements except that a foreign company whose home jurisdiction’s standards are deemed by the EU to be equivalent to IFRS Standards may use its home standards.
The IFRS for SMEs Accounting Standard is required or permitted No.
The IFRS for SMEs Accounting Standard is under consideration No.

Profile last updated: 18 July 2016

RELEVANT JURISDICTIONAL AUTHORITY

Organisation
Deutsches Rechnungslegungs Standards Committee (DRSC) [Accounting Standards Committee of Germany]
Role of the organisation

The objectives of the DRSC are:

  • to develop recommendations for the application of principles for consolidated financial reporting;
  • to provide advice on planned legislation on accounting regulations at national and EU level;
  • to represent the Federal Republic of Germany in international accounting and financial reporting bodies;
  • to develop Interpretations of the international accounting standards within the meaning of section 315a(1) of the Handelsgesetzbuch (HGB – German Commercial Code);
  • to enhance the quality of accounting and financial reporting; and
  • to promote research and education in the above-mentioned areas.
Website
www.drsc.de
Email contact
info@drsc.de

COMMITMENT TO GLOBAL FINANCIAL REPORTING STANDARDS

Has the jurisdiction made a public commitment in support of moving towards a single set of high quality global accounting standards?

Yes.

Refer to EU 1606/2002 Regulation on the application of international accounting standards (IAS).

Has the jurisdiction made a public commitment towards IFRS Accounting Standards as that single set of high quality global accounting standards?

Yes.

Refer to EU 1606/2002 Regulation on the application of international accounting standards (IAS).

What is the jurisdiction’s status of adoption?
Germany has already adopted IFRS Standards for the consolidated financial statements of all companies whose securities trade in a regulated market.
Additional comments provided on the adoption status?

As a member state of the European Union, Germanyis subject to EU 1606/2002 Regulation on the application of international accounting standards (IAS).

The EU IAS Regulation requires application of IFRS Standards as adopted by the EU for the consolidated financial statements of European companies whose securities trade in a regulated securities market starting in 2005. The EU IAS Regulation gives member states the option to require or permit IFRS Standards as adopted by the EU in separate company financial statements (statutory accounts) and/or in the financial statements of companies whose securities do not trade on a regulated securities market. See the Profile for the European Union for more detailed information about the EU IAS Regulation. Regulated markets in Germany are:

  • Boerse Berlin
  • Boerse Berlin Second Regulated Market
  • Duesseldorfer Boerse
  • Duesseldorfer Boerse Quotrix
  • Boerse Berlin Equiduct Trading
  • Boerse Berlin Equiduct Trading Second Regulated Market
  • Frankfurter Wertpapierboerse
  • Hanseatische Wertpapierboerse Hamburg
  • Niedersaechsiche Boerse Zu Hannover
  • Boerse Muenchen
  • Boerse Muenchen – Market Maker Munich
  • Baden-Wuerttembergische Wertpapierboerse
  • European Energy Exchange
  • Frankfurter Wertpapierboerse Xetra
  • Eurex Deutschland
  • Tradegate Exchange

Germany has opted for the use of IFRS Standards as adopted by the EU for the following:

  • consolidated financial statements of companies whose debt or equity securities trade in a regulated market and companies in the process of being listed on such a market: mandatory;
  • consolidated financial statements of unlisted companies and companies listed on public securities markets that are not regulated markets: optional; and
  • separate financial statements of listed and unlisted companies: not permitted as an option in lieu of national GAAP.

From 1 January 1998 to 31 December 2004 listed groups in Germany were permitted to apply IFRS Standards or US GAAP. EU Regulation 1606 came into force 1 January 2005. By 1 January 2005, 28 of the DAX 30 had already adopted IFRS Standards or US GAAP.

If the jurisdiction has NOT made a public statement supporting the move towards a single set of accounting standards and/or towards IFRS Accounting Standards as that set of standards, explain the jurisdiction's general position towards the adoption of IFRS Accounting Standards in the jurisdiction.
Not applicable

EXTENT OF IFRS APPLICATION

For DOMESTIC companies whose debt or equity securities trade in a public market in the jurisdiction:

Are all or some domestic companies whose securities trade in a public market either required or permitted to use IFRS Accounting Standards in their consolidated financial statements?
Yes.
If YES, are IFRS Accounting Standards REQUIRED or PERMITTED?
In accordance with the EU Accounting Regulation, IFRS Standards as adopted by the EU are required for the consolidated financial statements of all European companies whose debt or equity securities trade in a regulated market in Germany.
Does that apply to ALL domestic companies whose securities trade in a public market, or only SOME? If some, which ones?
The principal securities exchange in Germany (Frankfurt Stock Exchange) is a regulated market to which the EU IAS Regulation applies. Some other exchanges in Germany are also regulated markets to which the EU IAS Regulation applies. In addition, Germany has public securities markets that are not regulated markets under EU law; companies whose securities trade in those markets are not required to use IFRS Standards as adopted by the EU.
Are IFRS Accounting Standards also required or permitted for more than the consolidated financial statements of companies whose securities trade in a public market?

Yes.

There are no special requirements for certain classes of companies, eg financial services. There is no requirement for companies preparing their financial statements under IFRS Standards to reconcile to local GAAP.

For instance, are IFRS Accounting Standards required or permitted in separate company financial statements of companies whose securities trade in a public market?
No.
For instance, are IFRS Accounting Standards required or permitted for companies whose securities do not trade in a public market?
IFRS Standards as adopted by the EU are permitted for the consolidated financial statements of all companies whose securities do not trade in a regulated market.
If the jurisdiction currently does NOT require or permit the use of IFRS Accounting Standards for domestic companies whose securities trade in a public market, are there any plans to permit or require IFRS Accounting Standards for such companies in the future?
Not applicable.

For FOREIGN companies whose debt or equity securities trade in a public market in the jurisdiction:

Are all or some foreign companies whose securities trade in a public market either REQUIRED or PERMITTED to use IFRS Accounting Standards in their consolidated financial statements?
Yes.
If YES, are IFRS Accounting Standards REQUIRED or PERMITTED in such cases?

Required for some and permitted for others. Foreign companies whose securities trade in a regulated market in Germany (and generally in the EU) are required to report under IFRS Standards as adopted by the EU for their consolidated financial statements unless the European Commission has deemed their local accounting to be equivalent to IFRS Standards, in which case they may use their local standards. This is laid out on the ‘Financial Reporting’ page of the European Commission’s website.

Does that apply to ALL foreign companies whose securities trade in a public market, or only SOME? If some, which ones?
All.

IFRS ENDORSEMENT

Which IFRS Accounting Standards are required or permitted for domestic companies?
IFRS Standards as adopted by the European Union, which are IFRS Standards as issued by the Board with some limited modifications such as the temporary ‘carve-out’ from IAS 39. However, the resulting financial statements of the majority of companies can still be in full compliance with IFRS Standards.
The auditor’s report and/or the basis of presentation footnote states that financial statements have been prepared in conformity with:
IFRS Standards as adopted by the European Union.
Does the auditor's report and/or the basis of preparation footnote allow for ‘dual reporting’ (conformity with both IFRS Accounting Standards and the jurisdiction’s GAAP)?
Yes.
Are IFRS Accounting Standards incorporated into law or regulations?
Yes.
If yes, how does that process work?

The process is described in the IFRS jurisdiction profile of the European Union.

If no, how do IFRS Accounting Standards become a requirement in the jurisdiction?
Not applicable.
Does the jurisdiction have a formal process for the 'endorsement' or 'adoption' of new or amended IFRS Accounting Standards (including Interpretations) in place?
Yes
If yes, what is the process?
The process is described in the IFRS jurisdiction profile of the European Union.
If no, how do new or amended IFRS Accounting Standards become a requirement in the jurisdiction?
Not applicable.
Has the jurisdiction eliminated any accounting policy options permitted by IFRS Accounting Standards and/or made any modifications to any IFRS Accounting Standards?
Yes.
If yes, what are the changes?
Details are given in the IFRS jurisdiction profile of the European Union.
Other comments regarding the use of IFRS Accounting Standards in the jurisdiction?
None.

TRANSLATION OF IFRS ACCOUNTING STANDARDS

Are IFRS Accounting Standards translated into the local language?
Yes. The European Union has 24 official and working languages. They are: Bulgarian, Croatian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Irish, Italian, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish and Swedish. Before they are published in the Official Journal of the European Union, and therefore become binding under EU law, individual IFRS Standards must be translated into all of those languages (other than English and Irish).
If they are translated, what is the translation process? In particular, does this process ensure an ongoing translation of the latest updates to IFRS Accounting Standards?

Pursuant to a copyright waiver agreement with the Directorate-General for Translation of the European Commission, the Commission takes care of the translation into the official languages according to their own translation process. The translation only covers the IFRS contents as endorsed by the EC (the standard and mandatory guidance) – which is then published in the Official Journal of the European Union.

In addition, some countries (usually the standard setter or institute) have a translation contract with the IFRS Foundation to produce an ‘official translation’ for publication of a bound volume of IFRS Standards (usually the ‘Red Book’) and publication, in some cases, of individual standards and exposure drafts.

APPLICATION OF THE IFRS FOR SMEs ACCOUNTING STANDARD

Has the jurisdiction adopted the IFRS for SMEs Accounting Standard for at least some SMEs?
No.
If no, is the adoption of the IFRS for SMEs Accounting Standard under consideration?
No.
Did the jurisdiction make any modifications to the IFRS for SMEs Accounting Standard?
Not applicable.
If the jurisdiction has made any modifications, what are those modifications?
Not applicable.
Which SMEs use the IFRS for SMEs Accounting Standard in the jurisdiction, and are they required or permitted to do so?
Not applicable.
For those SMEs that are not required to use the IFRS for SMEs Accounting Standard, what other accounting framework do they use?
They can use German GAAP, ie the requirements of the German Commercial Code (Handelsgesetzbuch) or, in their consolidated financial statements, IFRS Standards as adopted by the EU.
Other comments regarding use of the IFRS for SMEs Accounting Standard?

The German Commercial Code was revised in 2009 as an alternative to the IFRS for SMEs Standard. Currently it is the policy of the German government to keep German GAAP for entities without public accountability.

The IFRS for SMEs Standard has been translated into German.