For proprietorships and partnerships, the Commercial Code prescribes only a very basic structure (§ 247 of commercial code HGB):
Debit ( dare ) Balance sheet
Debit Non-current assets
Debit Current assets
Debit Deferred expenses
Credit ( avere ) Equity
Credit Liabilities
Credit Deferred income
Further detailing to fulfil the GAAP, in particular the principle of clarity and transparency, is up to the judgment of the reporting unit. Once a structure has been decided upon, it should be kept constant (principle of formal comparability). For corporations, § 266 prescribes a detailed structure. The asset side is structured according to the common current/non-current distinction. Within the current and non-current assets, a further detailing is done according to the kind of asset. Advance payments are shown depending on what is paid for in advance, meaning each category of non-current items has a separate category of payments made in advance. The credit side singles out equity and then according to differences in certainty provisions and debt, i.e. the current/non-current distinction is not used here, but this information must be given in the notes. Further detailing is again based on the kind of liability. For the application of this structure the following is to be considered:
– This structure must be applied in this way. Small corporations can neglect items with Arabic numerals (§ 266 sect. 1).
– In the balance sheet, the figures of the current year and of the previous year must be reported. If previous year information is not comparable or was adjusted, this needs to be explained in the notes (§ 265 sect. 2).
– If an asset or a liability cannot be attributed unambiguously to one item, it is attributed to one item with reference to the other relevant items or with an explanation in the notes (§ 265 sect. 3).
– A further detailing of the structure is possible when the given structure is respected. Additional items and subtotals can be added if the content is not covered by existing items (§ 265 sect. 5).
– Structure and naming of the items with Arabic numerals can be changed if this improves clarity and transparency because of the particularities of the corporation (§ 265 sect. 6).
– Items with Arabic numerals may be aggregated if the amounts are not material for a true and fair view or if clarity and transparency are improved by doing so; in the latter case detailed information must be given in the notes (§ 265 sect. 7).
– Blank lines, i.e. items with a zero value in the current and the preceding period, can be neglected (§ 265 sect. 8).
– Once a structure and naming are decided, they must be kept according to the principle of formal comparability ( § 265 sect. 1).
Debit side according to § 266 (HGB) sect. 2.
A. Non-current assets
I. Intangible assets
. Internally generated commercial property rights, and similar rights and assets
. Concessions, commercial property rights and similar assets as well as licenses of such
rights and similar assets, acquired against remuneration
. Goodwill
. Payments made in advance
II. Tangible assets
. Land, rights similar to land, and buildings including buildings on third-party land
. Technical facilities and machines
. Other facilities and office equipment
. Payments made in advance and assets under construction
III. Financial assets
. Shares in affiliated companies
. Loans to affiliated companies
. Participations
. Loans to companies in which a participation exists
. Non-current securities
. Other loans
B. Current assets
I. Inventories
. Raw materials and other materials
. Unfinished goods and services
. Finished goods and merchandise
. Payments made in advance
II. Receivables and other assets
. Trade receivables
. Receivables from affiliated companies
. Receivables from companies in which a participation exists
. Other assets
III. Securities
. Shares in affiliated companies
. Other securities
IV. Cash, positive deposits at central bank or other banks, checks
C. Deferred expenses
D. Deferred tax assets
E. Asset surplus from netting
Credit side according to § 266 (HGB) sect. 3.
A. Equity
I. Subscribed capital
II. Capital reserves
III. Revenue reserves
. Legal reserves
. Reserves for shares of a controlling entity
. Statutory reserves
. Other revenue reserves
IV. Profit/loss carry forward
V. Net profit/loss of the year
B. Provisions
. Provisions for pensions and similar obligations
. Tax provisions
. Other provisions
C. Debt
. Bonds, thereof convertible
. Bank debt
. Received advance payments for orders
. Trade payables
. Payables from bills of exchange
. Payables to affiliated companies
. Payables to companies in which a participation exists
. Other payables, thereof tax payables and social security payables
D. Deferred income
E. Deferred tax liabilities