Requirements towards group financial accounting

Given the basic changes with regard to the balancing and assessment of international financial accounting standards such as IFRS and US-GAAP as well as national standards (e.g. HGB, Swiss GAAP FER, Austrian UGB), new requirements are continuously placed towards external group accounting.

The most extensive revisions are currently being carried out in international financial accounting. The close cooperation between IASB and FASB lead to new accounting approaches. Following several adopted changes to Business Combinations II, the two institutions are currently working on an extensive revision of the „Financial Statement Presentation“.

Classification of financial statement according to the new key principles

The changes brought about by Business Combinations primarily have to do with the balancing of differences resulting from capital consolidation. According to these changes, the IFRS balancer must, amongst others, observe the following particularities:

  • Full Goodwill Method – 100% goodwill, which means that in the case of minority shares, both the participation perspective (amount invested by the third-party shareholder) as well as the equity perspective (minority share of equity) need to be considered.
  • Allocation of goodwill to the group-relevant cash-generating units (CGU). In other words, splitting of goodwill between mother company and subsidiary.
  • Impairment test of goodwill with regard to the corresponding CGUs and if necessary, unscheduled depreciations.
  • Recognized liquidation of OCI (other comprehensive income) shares in the case of a complete splitting off of the subsidiary.


The next major challenge will probably involve the results of the „Financial Statement Presentation“ project. Groups will possibly have to deal with the following requirements that would have a major impact on balancing, processes, and systems.

  • Uniform structuring of the closing elements balance sheet, group P&L statement, and cash flow statement after operational business, financing, income taxes, and no longer pursued fields of activity. The fields are to be classified further (re. illustration).
  • Binding illustration of the P&L statement according to the cost of sales accounting procedure (at least for producing companies)
  • Illustration of cash flow according to the direct method

The new German legislator has devised a series of new regulations for HGB balancers within the scope of the BilMoG (balance sheet regulations modernization law). In Switzerland as well, changes to the SWISS GAAP FER are carried out continuously.

Questions on the current modifications to group financial accounting?
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