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National and International Developments in Risk Reporting: May the German Accounting Standard 5 Lead the Way Internationally?

Published online by Cambridge University Press:  06 March 2019

Michael Dobler

Extract

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In this journal, Buchheim and Beiersdorf discussed recent changes in the regulation of the management report (Lagebericht) in Germany. The German Commercial Code (HGB – Handelsgesetzbuch) requires a management report by individual entities classified as companies with limited liability in § 289 and by groups in § 315. The reporting requirements of the latter are specified by the German Accounting Standard GAS 15 on Management Reporting. The authors award the German regulation to potentially lead the way internationally.

Type
Developments
Information
German Law Journal , Volume 6 , Issue 8 , 01 August 2005 , pp. 1191 - 1200
Copyright
Copyright © 2005 by German Law Journal GbR 

References

1 See Regine Buchheim/Kati Beiersdorf, New Developments in Management Reporting – The Modernisation of the Annual Report, 6 German Law Journal 861-868 (2005) www.germanlawjournal.com.Google Scholar

2 See Directive 2003/51/EC of June, 18th, 2003, Art. 1(14)(a), Art. 2(2)(a).Google Scholar

Cite as: Dobler, Michael, National and International Developments in Risk Reporting: May the German Accounting Standard 5 Lead the Way Internationally?, in: 6 German Law Journal 1191 (2005), at: www.germanlawjournal.com/pdf/Vol06No08/PDF_Vol_06_No_08_1191-1200_Developments_Dobler.pdf Google Scholar

3 See, e.g., Kajüter, Peter/Winkler, Carsten, Die Risikoberichterstattung der DAX100-Unternehmen im Zeitvergleich, 3 Zeitschrift für kapitalmarktorientierte Rechnungslegung 228 (2003); GASC, Deutscher Standardisierungsrat beschließt Neuausrichtung, Press Release www.standardsetter.drsc/docs/press_releases/gasb_restructuring.html (July 25th, 2003).Google Scholar

4 See § 342 HGB; Dieter Ordelheide, Germany – Group Accounts, Transnational Accounting 1385-1368 (Dieter Ordelheide/KPMG (eds.), 4th ed. 2001).Google Scholar

5 For a discussion see Michael Dobler, Auditing Corporate Risk Management – A Critical Analysis of a German Particularity, 1 The ICFAI Journal of Audit Practice No. 2 51-52, 56-57 (2004).Google Scholar

6 See Directive 2003/51/EC, Art. 1(4)(a) amending Art. 46(1)(a) of Directive 78/660/EEC, and Directive 2003/51/EC, Art. 2(10)(a) amending Art. 36(1) of Directive 83/349/EEC.Google Scholar

7 See Directive 2001/65/EC of September 21st, 2001, Art. 1 (4) amending Art. 46(2) of Directive 78/660/EEC, and Directive 2001/65/EC, Art. 2 (3) amending Art. 36(2) of Directive 83/349/EEC.Google Scholar

8 See IDW RS HFA 1.29-36 (IDW Stellungnahme zur Rechnungslegung Hauptfachausschuß 1).Google Scholar

9 In a general decision, the local court of Duisburg decided that bulletins of the IDW may have particular authority. However, they cannot substitute the legal interpretation by a court. See Amtsgericht Duisburg, Beschluß v. 31.12.1993, 23 HR B 3193, 47 Der Betrieb 466-467 (1994).Google Scholar

10 See GAS 5.1, .3. GAS 5.8 recommends to apply GAS 5 to risk reports of individual companies.Google Scholar

11 See Deutscher Rechnungslegungsänderungsstandard 3, issued on July 15th, 2005, Art. 9.Google Scholar

12 GAS 5.9.Google Scholar

13 See GAS 5.30-33.Google Scholar

14 See GAS 5.12-13.Google Scholar

15 See GAS 5.15.Google Scholar

16 See GAS 5.18-19.Google Scholar

17 See GAS 5.20, cumulatively requiring „reliable and recognised methods“, the absence of „undue economic expense“ and effects of the quantification on „the decision of users“.Google Scholar

18 See GAS 5.23-24.Google Scholar

19 See GAS 5.25.Google Scholar

20 See GAS 5.26-27.Google Scholar

21 See GAS 5.31.Google Scholar

22 See GAS 5.21.Google Scholar

23 See GAS 5.28-29.Google Scholar

24 See IDW RS HFA 1.52; GAS 15.83.Google Scholar

25 See GAS 5.30-33; GAS 15.83, .91.Google Scholar

26 See IDW RS HFA 1.52.Google Scholar

27 See Regulation 1606/2002 of July, 19th, 2002; § 315a HGB implemented by the BilReG.Google Scholar

28 See, e.g., Statement of Auditing Standards (SAS) 69; Miller/Redding/Bahnson, The FASB – The People, the Process and the Politics 61 (4th ed., Boston et al. 1998).Google Scholar

29 See Form 20-F, Item; Form 10-K, Item 7; Regulation S-K, Item 303.Google Scholar

30 See Statement of Financial Accounting Standards SFAS 5.9-12; SFAS 5.17 read in connection with Accounting Research Bulletin ARB 50; SOP 94-6.11-16.Google Scholar

31 See SFAS 133.44-45.Google Scholar

32 See Statement of Position SOP 94-6.11-16.Google Scholar

33 See SOP 94-6.21-24; SFAS 131.39, .108.Google Scholar

34 See International Accounting Standard IAS 37.10, .89-92.Google Scholar

35 See IAS 32.52-85; ED 7.Google Scholar

36 See IAS 1.116-122.Google Scholar

37 See IAS 1.23-24.Google Scholar

38 See Donald E. Kieso/Jerry J. Weygandt/Terry D. Warfield, Intermediate Accounting 1296 (11th ed. 2003).Google Scholar

39 One could argue that SOP 94-6 in the US is also a standard dealing with risk related disclosures. However, SOP 94-6 must be read in connection with SFAS and only addresses some specific risk disclosures.Google Scholar

40 To digress briefly, the Institute of Chartered Accountants in England and Wales issued a proposal for a Statement of Business Risk in 1997. However, the proposal did not become a standard.Google Scholar

41 See, e.g., IAS 1.116.Google Scholar

42 See Draft-GAS 5.B3 (Reasoning).Google Scholar

43 While GAS are available in English language in general, Draft-GAS 5 is the first and only draft of a GASB-standard issued in English. See www.standardsetter.de/drsc/docs/drafts/5_eng.html for Draft-GAS 5 published on November 24th, 2000.Google Scholar

44 For a detailed analysis of GAS 5 see Michael Dobler, Risikoberichterstattung – Eine ökonomische Analyse 162-181 (Frankfurt am Main 2004).Google Scholar

45 See Directive 2004/109/EC of December 15th, 2004, Art. 4(2)(b) and (c), Art. 5(3).Google Scholar

46 See www.iasb.org/meetings/iasb_observernotes.asp for notes on the IASB meeting in June 2005, the status of the project, and the planned Discussion Paper.Google Scholar