GAS 26 Associates and GAS 27 Proportionate Consolidation published

Today, the ASCG’s German GAAP Technical Committee has issued the German Accounting Standard No. 26 Associates (GAS 26) and the German Accounting Standard No. 27 Proportionate Consolidation (GAS 27). The initial application date for both standards was determined for fiscal years beginning after December 31, 2019.

GAS 26 aims to set out detailed guidance on the accounting for associates and the application of the equity method, as outlined in sections 311 and 312 of the HGB. Minor technical changes to E-GAS 34 relate, on the one hand, to capital measures at the level of the associate, for which ‘becoming aware’ of any such measure rather than the party who triggered it should now be the decisive factor, and, on the other hand, to the negative presumption of an investment meeting the definition of an associate (for shareholdings < 20%). This is will be made an indicator rather than a criterion and has to be supported by drawing on all available information.

GAS 27 sets out in greater detail the requirements of section 310 of the HGB concerning proportionate consolidation, which govern the inclusion of a joint venture in the consolidated financial statements. It also specifies the criteria for the existence of a joint venture, which is a condition for exercising the option to apply proportionate consolidation.
Development of the standards has been supported by the ASCG’s Consolidation Working Group.

GAS 26 and GAS 27 will now be transmitted to the Federal Ministry of Justice and Consumer Protection for publication as per section 342(2) of the HGB.