DACH regulatory compliance introduction
This article covers consolidation compliance requirements for the DACH region. It extends the Consolidation Framework documentation — read the Framework documentation first for platform concepts, the consolidation lifecycle, and configuration procedures.
This article covers two regulatory frameworks applicable to DACH entities:
HGB (Handelsgesetzbuch — German Commercial Code) — for entities preparing consolidated financial statements under German statutory requirements.
IFRS — for entities in the DACH region required or electing to report under International Financial Reporting Standards, including DAX-listed companies filing under the EU IAS Regulation.
Section |
Purpose |
|---|---|
DACH compliance overview |
Side-by-side comparison of HGB and IFRS across key consolidation areas |
HGB compliance |
HGB fundamentals, configuration requirements, group consolidation, FAQ, troubleshooting, checklist, glossary |
IFRS compliance |
IFRS fundamentals, configuration requirements, group consolidation, FAQ, troubleshooting, checklist, glossary |
HGB and IFRS share the same Lineos consolidation lifecycle and platform components. They differ in how those components are configured to meet their respective regulatory requirements.
Area |
HGB |
IFRS |
|---|---|---|
Governing standard |
Handelsgesetzbuch (HGB) — German Commercial Code; DRS (Deutsche Rechnungslegungs Standards) |
IASB standards as adopted by the EU (EU IAS Regulation) |
Applies to |
All German entities meeting §290 HGB consolidation obligation |
DAX-listed entities; entities electing IFRS under EU IAS Regulation |
Consolidation trigger |
Control per §290 HGB — controlling influence, typically majority voting rights |
Control per IFRS 10 — power + exposure to variable returns + ability to affect returns (all three required) |
Goodwill treatment |
Scheduled amortization over useful life; 10-year default where life not reliably estimable (§253(3) HGB) |
Impairment-only — no amortization (IAS 36). Annual impairment test required. |
Negative goodwill / negative difference |
Unterschiedsbetrag — shown after equity on Konzernbilanz; released to income under §309(2) HGB conditions only |
Bargain purchase — recognized immediately in profit or loss (IFRS 3.34) |
Proportional consolidation (JVs) |
Valid under §310 HGB for jointly controlled entities |
Not permitted for JVs — equity method required (IFRS 11). Valid for joint operations only. |
Currency translation — P&L |
Average rate (Durchschnittskurs) — §308a HGB |
Average rate (AVG) — IAS 21.39(b) |
Currency translation — balance sheet |
Closing rate (Stichtagskurs) — §308a HGB |
Closing rate (END) — IAS 21.39(a) |
Currency translation — equity |
Historical rate — rate at date each equity component originally arose; fixed permanently. Not the opening rate. — §308a HGB |
Historical rate — IAS 21.39(c). Not the opening rate. |
Currency translation reserve |
Eigenkapitaldifferenz aus Währungsumrechnung — posted within equity after reserves. Not OCI. — §308a HGB |
FCTR (Foreign Currency Translation Reserve) — posted in OCI; reclassified to P&L on disposal (IAS 21.48) |
P&L presentation |
GKV (Gesamtkostenverfahren) or UKV (Umsatzkostenverfahren) — §275 HGB |
By nature or by function — entity elects (IAS 1) |
Mandatory financial statements |
Konzernbilanz, Konzern-GuV, Konzernanhang, Kapitalflussrechnung, Eigenkapitalspiegel, Konzernlagebericht (§297, §315 HGB) |
Statement of Financial Position, Statement of P&L and OCI, Statement of Changes in Equity, Statement of Cash Flows (IAS 7), Notes |
Deferred tax on PPA |
Mandatory per §306 HGB — no carve-out except §306 Satz 3 (no deferred tax on goodwill/negative goodwilll difference itself) |
Mandatory per IAS 12 — no carve-out for goodwill-related differences |
Note: This table provides a high-level comparison. Detailed framework-specific requirements, §-references, and Lineos configuration settings are in the sections below.