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Financial Accounting

Book Description

Every German student of business administration needs to have a basic understanding of accounting according to German GAAP, and thanks to globalization many courses about German accounting are nowadays held in English to improve the language skills of the students.

In addition many foreign subsidiaries of German companies have to prepare their part of consolidated financial statements according to German GAAP. So far, these professionals can rely on German literature only.

The first part of the book offers a compact introduction to financial statements according to German GAAP, the second part comprises exercises on individual topics with solutions and case studies for in-depth and effective learning.

This introduction provides ideal support for German-speaking students taking Englishspeaking lectures in the field and is furthermore valuable for professionals looking for explanations when preparing the data for consolidated financial statements.

  • Includes exercises and case studies for practice
  • Ideal textbook for students of German Universities attending English-speaking lectures in financial management
  • Ideal introduction for professionals with a succinct explanation and additional support with a glossary and vocabulary

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Preface
  5. Contents
  6. Abbreviations
  7. List of tables
  8. List of figures
  9. How to use this book
  10. Part I: Financial statements according to German GAAP
    1. 1 Introduction to accounting
      1. 1.1 Purpose of accounting
        1. 1.1.1 The fundamental question and the fundamental equation
        2. 1.1.2 Financial and managerial accounting
        3. 1.1.3 Content of accounting/basic terms
      2. 1.2 Elements of financial statements
        1. 1.2.1 Balance sheet
        2. 1.2.2 Income statement and changes-in-equity statement
        3. 1.2.3 Cash flow statement
        4. 1.2.4 Notes and management report
      3. 1.3 Accounting procedures
        1. 1.3.1 Accounts, debiting, crediting
        2. 1.3.2 Journalizing and posting
        3. 1.3.3 Opening and closing of accounts
        4. 1.3.4 Specific topics of double-entry accounting
          1. 1.3.4.1 Taxes
          2. 1.3.4.2 Received price reductions
          3. 1.3.4.3 Granted price reductions
    2. 2 Introduction to German accounting
      1. 2.1 Legal framework
        1. 2.1.1 Legal regulations
        2. 2.1.2 Applicability and simplifications
          1. 2.1.2.1 Applicability of Commercial Code depending on legal form
          2. 2.1.2.2 Applicability of Commercial Code depending on size class
        3. 2.1.3 Consequences of legal form and size classes
        4. 2.1.4 Consolidated financial statements
      2. 2.2 Reporting conception
      3. 2.3 Generally Accepted Accounting Principles
        1. 2.3.1 Overview
        2. 2.3.2 Principles of documentation
        3. 2.3.3 Principles of accounting
          1. 2.3.3.1 General principles
          2. 2.3.3.2 Recognition principles
          3. 2.3.3.3 Measurement principles
      4. 2.4 Balance sheet: general recognition rules
        1. 2.4.1 Recognition of assets
        2. 2.4.2 Initial measurement of assets
          1. 2.4.2.1 Acquisition costs
          2. 2.4.2.2 Production costs
        3. 2.4.3 Recognition of liabilities
        4. 2.4.4 Measurement of liabilities
      5. 2.5 Stock taking/inventory
      6. 2.6 Definition of income and expense
    3. 3 Financial statements according to Commercial Code
      1. 3.1 Balance sheet
        1. 3.1.1 Structure
        2. 3.1.2 Recognition prohibitions
        3. 3.1.3 Non-current assets
          1. 3.1.3.1 Classification non-current–current
          2. 3.1.3.2 Subsequent measurement
          3. 3.1.3.3 Presentation
          4. 3.1.3.4 Intangible assets
          5. 3.1.3.5 Tangible assets
          6. 3.1.3.6 Financial assets
        4. 3.1.4 Excursus: accounting for financial instruments according to IFRS
        5. 3.1.5 Current assets
          1. 3.1.5.1 Inventories
          2. 3.1.5.2 Accounts receivable
          3. 3.1.5.3 Securities and cash/cash equivalents
        6. 3.1.6 Equity
          1. 3.1.6.1 Subscribed capital and capital reserves
          2. 3.1.6.2 Revenue reserves and retained earnings
        7. 3.1.7 Provisions
          1. 3.1.7.1 Accounting for provisions
          2. 3.1.7.2 Specifics for pension provisions
        8. 3.1.8 Debt/payables
        9. 3.1.9 Contingent liabilities
        10. 3.1.10 Specific topics
          1. 3.1.10.1 Deferrals and accruals
          2. 3.1.10.2 Deferred taxes
          3. 3.1.10.3 Hedge accounting
          4. 3.1.10.4 Accounting for leases
      2. 3.2 Income statement
      3. 3.3 Notes
        1. 3.3.1 Overview
        2. 3.3.2 General information (§ 284)
        3. 3.3.3 Additional information about balance sheet and income statement
        4. 3.3.4 Additional information not related to balance sheet or income statement
      4. 3.4 Cash flow statement
        1. 3.4.1 Purpose and methods
        2. 3.4.2 Structure of cash flow statement
      5. 3.5 Management report
        1. 3.5.1 Purpose and principles
        2. 3.5.2 Structure and content
        3. 3.5.3 Upcoming extended CSR reporting
    4. 4 Consolidated financial statements
      1. 4.1 Purpose
      2. 4.2 Legal requirements
        1. 4.2.1 Mandatory preparation
        2. 4.2.2 Applicable rules
      3. 4.3 Elements and content
      4. 4.4 General principles
      5. 4.5 Consolidation scope
      6. 4.6 Consolidation procedures
        1. 4.6.1 Full consolidation
          1. 4.6.1.1 Comparability of data
          2. 4.6.1.2 Currency conversion
          3. 4.6.1.3 Capital consolidation
          4. 4.6.1.4 Liability consolidation
          5. 4.6.1.5 Consolidation of intercompany profits
          6. 4.6.1.6 Income consolidation
          7. 4.6.1.7 Deferred taxes on consolidation procedures
        2. 4.6.2 Proportional consolidation
        3. 4.6.3 Associated companies/at-equity consolidation
      7. 4.7 Consolidated notes
  11. Part II: Exercises
    1. 5 Exercises on individual topics with solutions
      1. 5.1 Bookkeeping and basic terms
      2. 5.2 Exercises on fundamental concepts and GAAP
      3. 5.3 Exercises on non-current assets
      4. 5.4 Exercises on current assets
      5. 5.5 Exercises on equity
      6. 5.6 Exercises on provisions
      7. 5.7 Exercises on debt
      8. 5.8 Exercises on deferred items and deferred taxes
      9. 5.9 Exercises on income statement and cash flow statement
    2. 6 Case studies
    3. 7 Solutions for case studies
  12. Additional information
    1. 8 Glossary
    2. 9 Vocabulary
  13. Literature
  14. Index
  15. About the author