standards in the field of accounting): A set of accounting standards for capital market-oriented companies, also in Germany – as in the EU as a whole – that has been mandatory since the beginning of 2005 and updates IAS. The main objective is to ensure comparability of financial statements within the EU. In contrast to the German Commercial Code (HGB), which focuses on the protection of creditors and the preservation of capital, the IFRS are geared to the informational interests of investors. Important features: – current market prices must be used for many items (fair value account), which leads to increased volatility in the reporting of profits and balance sheet ratios; hidden reserves to smooth out these fluctuations are no longer permitted; – the valuation and accounting options permitted under HGB disappear; however, the overall scope for valuation is increased, e.g. through provisions such as the accounting of the balance sheet items. unfortunately, there is still no compliance with US GAAP; the IFRS are to be gradually harmonized by 2020 at the latest and will probably remain a “construction site” until then. – Whether the IFRS actually meet the expectations placed on them with regard to the reliability and transparency of the information on the financial statements (true and fair view) and thus fulfil an important
The fact that IFRS contributes to the stability of the financial markets is disputed. Critics see the IFRS framework drifting further and further away from the original goal of rule-based accounting, toward unnecessary and essential obscuring subtleties. – See disclosures, obfuscated, European System of Accounts, General Accepted Accounting Principles, IAS 39, IFRS dialects, information overload, International Accounting Standards, International Accounting Standards Board, plain language, combination effect, freestyle, rule-bound, asset, incorporated, understandability, predictions, materiality, fitness for purpose. – Cf. ECB Monthly Report of February 2004, p. 77 ff., BaFin Annual Report 2004, p. 66 f., and the respective BaFin Annual Report.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/