Kassel, Germany

The Accounting of Goodwill under German Commercial and Tax Law

By Andreas Gottmann, FACT GmbH

As in most other countries, both German commercial law and German tax law differentiate between goodwill acquired for a consideration and internally generated goodwill. Only goodwill acquired against payment may be capitalised. Under German commercial law, goodwill acquired for a consideration is recognised as an asset with a limited service life and regularly amortised over five years. Longer periods are also conceivable, provided that this is economically credible. If a longer service life is assumed, this must be justified in the notes to the financial statements as part of the annual financial statements. Extraordinary depreciation must be carried out if there is a permanent reduction in value.

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Hamburg, Germany

Accounting Treatment of SaaS at the Level of Both Contractual Parties

By Imke Reich, nbs partners

“I can’t think of anything that isn’t cloud computing (…).” Larry Ellison, Chairman, Oracle

Software as a Service (SaaS), the largest market segment of cloud computing, is typically characterised as a service, where the provider grants the user the right to continuously access a software in a cloud infrastructure managed and controlled by the provider for a certain period. Accounting for SaaS arrangements at the level of the user is not clearly specified under IFRS.

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Bonn, Germany

Sustainability in Financial Reporting

By Dr Thomas Ditges, DITGES Rechtsanwälte Wirtschaftsprüfer Steuerberater

Climate, on everyone’s lips, is just a word. Corporate responsibility extends far beyond that. The accounting system has already recognised this, though this has so far remained mostly hidden from the nonprofessional. For large undertakings and groups, especially with more than 500 employees, the German legislator has implemented the EU Directive regarding disclosure of non-financial and diversity information from 2014 with effect from 2017, amending the Directive on the annual financial statements, consolidated financial statements and related reports.

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Hamburg, historic warehouse district

Value Added Incentives: Accounting for Share-Based Payments

By Tobias Schreiber, nbs partners

Adding value to a company is one of the most important strategic achievements from a shareholder or management perspective. An effective employee incentive programme sends employees a clear message that management understands what truly motivates them to do their best work and is willing to provide it.

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Fisherman's wharf in San Francisco

The New US GAAP Revenue Recognition Standards

By Tom Parry, Navolio & Tallman LLP

Are your clients ready for the new US revenue recognition standards? FASB Update 2015-14 – Revenue from Contracts with Customers (Topic 606) is effective for non-public entities, including not-for-profit entities, for annual reporting periods beginning after 15 December 2018. The new guidance affects any reporting organisation that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts).

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All I’ve Got are Simple Trade Receivables - Is IFRS 9 Relevant to Me?

By Allan Mundell, Nolands SA

IFRS 9 Financial Instruments became effective from 2018, addressing the accounting for all financial assets and liabilities, from simple trade receivables and payables to intercompany loans. IFRS 9 introduces, amongst other things, a new model for impairments. Whereas the previous standard, IAS 39, required the application of an incurred loss model, IFRS 9 moves us into a world of expected losses.

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Her Majesty's Revenue and Customs (HMRC) - UK government tax office in London.

Provisions and Contingencies

by David Pritchard, Mander Duffill

Determining whether a provision for either an asset or liability needs to be recognised represents a dilemma regularly faced by accountants. There is further complexity when deciding whether there is a need to disclose contingent assets or liabilities.

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Contemporary houses in Dordrecht


By Ronald Krol, EJP Accountants & Adviseurs

When reference is made to real estate within the Dutch reporting rules on property, the (intended) use should be distinguished for property for own use (Guidelines for annual reporting hereinafter referred to as: RJ 212) and investment property (RJ 213 / Guidelines for annual reporting for small legal entities, hereinafter referred to as: RJk B2).

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