Fiscal year

The fiscal year ( in tax law: Marketing year ), the period for which a business summarizes the result of the business activity in the financial statements.

General

The term of the fiscal year is in the Commercial Code ( § 242 HGB) used the concept of the marketing year in the Income Tax Act (§ 4a Income Tax Act) and in general usage in the law of the home owners' association (§ 28 para 1 sentence 1 WEG). Also, the term fiscal year is used occasionally. In law, the profit associations the Civil Code assumes that each club has a fiscal year ( § 39 para 2 BGB). In the language (especially in speeches, reports, press articles ) it is also called the club year.

Technically, the fiscal year begins and ends with the opening balance sheet at the balance sheet date, which shall be no more than 12 months after the opening date ( § 240 paragraph 2 sentence 2 HGB). Rule is the compliance of the financial year with the calendar year, however, deviations are permitted. Here it is important to note that the fiscal year, once selected, is generally maintain due to the principle of balance sheet continuity. Deviations of the fiscal year from the calendar year subject to the tax effectiveness of the approval of the competent tax office.

Short financial year

With a change of the financial year, there is automatically a short fiscal year. The short financial year usually includes a period of less than 12 months and is intended to bridge the period of adjustment between two complete financial years. Therefore, a short fiscal year may be shorter, but not longer than 12 months ( § 240 paragraph 2 sentence 2 HGB). Reasons for the short financial year are start-ups, resolutions, dispositions and changes to another regular reporting date.

If a company established in the course of a year and the fiscal year shall be the same as the calendar year, then the result for the year of founding a short fiscal year from date of incorporation to 31 December of the same year.

From calendar year different fiscal year

One of the calendar year " different fiscal year " can be selected depends on the industry in order to collect the balance sheet better about typical seasonal developments. It may be appropriate to choose a balance sheet date, the considered date falls on a seasonal peak, at which the stockpile largely degraded and sales priorities are taken into account.

In agriculture, a year is common, depending on the type of activity either on 1 May (mainly grassland) or 1 July begins. In earlier times began and ended the agricultural year usually on the Martinmas (November 11 ): The field and livestock outdoors was usually in early November completed, so that the often for Martinmas held festivals and church fairs were the most favorable opportunity to pay rents and interest and complete or renew contracts.

In turn applies a different year for growing grapes. The income tax law permitted financial year if farmers and foresters is shown in detail in § 8c of the Income Tax.

Similar seasonal focal points have also other industries that align their differing fiscal years include the inventory cycle or sales priorities.

Other reasons for a differs from the calendar year, fiscal year are:

• Of its affiliated companies in the adjustment to the financial year of the parent company, which has its headquarters often abroad;
• Adaptation to long-term obligations with accounting periods, for example at waste incineration and other waste management contracts with waste management companies;
• Use temporary production settings such as regular maintenance and cleaning, as inventory work will be facilitated; Inventory, finished goods, semi-finished products, equipment, raw materials, etc. can then be more easily and accurately capture as during production;
• Adapt to the competitive environment;
• Facilitate a more reliable and more timely assessment of the overall annual performance of a company, when around 50 % of net income in the first and will not be generated in the fourth fiscal quarter;
• Adaptation to seasonal weather-related processes in the agricultural, forestry and sports ( " sports year "); including falls, for example, adaptation to the Schedule of the Bundesliga from August to May or the choice of the financial year from March to February in the field of motor sports;
• Other seasonal adjustments (eg on the Christmas shopping, or to avoid seasonal peak times of financial authorities and tax advisors ).

Changes of the financial year

A change in the fiscal year requires an amendment. For corporations, this has the consequence that the amendment must be entered in the commercial register, because an amendment for corporations only upon its registration in the commercial register is effective. With this amendment, according to prevailing opinion, a retroactivity is observed. To this end, the Higher Regional Court of Frankfurt am Main decided that the registration of the alteration of a limited liability company agreement in terms of the fiscal year is in any event inadmissible if the short fiscal year formed was already expired at the time of the resolution. Because of the constitutive effect of registration ( § 54 para 3 Limited Liability Companies Act ) could the change of a GmbH company agreement in principle have no retroactive effect. The decision refers to a decision of the Federal from the year 1997. The change of the financial year must be entered before the start of the new fiscal year in the commercial register, for reasons of legal certainty and the protection of creditors.

For business enterprises, the tax office of a conversion of the financial year must agree on a different period from the calendar year, so that the changed economic year for tax purposes is ( § 4a para 1 No. 2 p 2 Income Tax Act, the Income Tax § 8b ). For traders the profit of the deviating financial year than in the calendar year is based, in which the marketing year ends ( § 4a para 2 No. 2 Income Tax Act); with farmers and foresters, a division takes place.

Year in the consolidated

During the fiscal year of the consolidated and parent company must be absolutely identical ( § 299 paragraph 1 HGB ), this need not be the case for consolidated subsidiaries. However, if the balance sheet date, a group company of more than three months before the date of the consolidated financial statements, as this company is included on the basis of a set up on the date and the period of the consolidated financial statements, interim financial statements ( short fiscal year) in the consolidated financial statements ( § 299 section 2 HGB ).

IAS

The international accounting rules are consistent with the legal situation in Germany. The IAS put the whole financial year ( "financial year" ) requires as a rule, and deal in detail with the short fiscal year. Objective of IAS 34 is to prescribe the minimum components of an interim report and the regulation of accounting and valuation principles for financial statements that are prepared for an interim period. According to IAS 34.4, the period of a shortened fiscal year ( "interim period" ) is shorter than a full year, with interim financial statements ( "interim report" ) is created with complete or summarized figures. Who has such interim financial statements when to create, leaves IAS 34.1 of the national legislation.