GAS 13 - Consistency Principle and Correction of Errors

• Adopted by the German Accounting Standards Board (GASB) on 8 July 2002. Publication of the authoritative German version by the Federal Ministry of Justice under section 342(2) of the HGB on 23 October 2002 (Federal Gazette No. 198a).
• Revised paragraph 4, paragraph 6, paragraph 18, paragraph 32, and paragraph 34 adopted by the GASB on 7 November 2003. Publication of the revised authoritative German version by the Federal Ministry of Justice under section 342(2) of the HGB on 2 July 2004 (Federal Gazette No. 121a).
• Revised paragraph 34 and new paragraph 1a and paragraph 1b adopted by the GASB on 15 July 2005. Publication of the revised authoritative German version by the Federal Ministry of Justice under section 342(2) of the HGB on 31 August 2005 (Federal Gazette No. 164).
• Revised paragraphs 1a, 1b, 4, 6, 7, 9, 10, 11, 12, 13, 28, and 34 adopted by the Accounting Standards Committee of Germany (ASCG) on 21 April 2016. Publication of the authoritative German version by the Federal Ministry of Justice and Consumer Protection under section 342(2) of the HGB on 21 June 2016.
• Revised paragraph 1b adopted by the Accounting Standards Committee of Germany (ASCG) on 22 September 2017. Publication of the authoritative German version by the Federal Ministry of Justice and Consumer Protection under section 342(2) of the HGB on 4 December 2017.

This Standard sets out the procedures for the application of the consistency principle and for the correction of errors in consolidated financial statements. The recommendation to apply this Standard to individual company financial statements does not extend to the correction of errors made in previous years since the restatement of individual company financial statements can give rise to significant legal and tax consequences.

The Standard stipulates that accounting policies be applied consistently from one period to the next. Departure from the consistency principle is only permissible in justified exceptional circumstances.

The effect of a change in the accounting policies applied shall be computed retrospectively. The effect of the change relating to the current period shall be recognised in the relevant items of the income statement for the current year. The cumulative effect of the change relating to earlier periods shall be disclosed separately in the income statement for the current year. Pro forma disclosures shall be presented for the previous years’ figures.

A change in consolidation method is only permitted in specified exceptional circumstances. Pro forma disclosures are also required when the consolidation method is changed.

Accounting estimates shall be reasonable, realistic and free from bias. They shall be reassessed at each year-end reporting date in order to take account in particular of new facts, new knowledge and additional information. The effect of a change in an accounting estimate shall be included in the determination of net profit or loss in the current period.

In addition, the Standard sets out the procedures for the correction of errors. The effect of an error in previous reporting periods shall be included in the determination of net profit or loss in the current period. In those cases where an error means that the previous presentation of the financial position and performance of the group is no longer considered to be reliable, the relevant financial statements shall be restated.

Finally, this Standard stipulates the scope of disclosures to be made in the notes to the consolidated financial statements in the case of a change in the accounting policies applied or a correction of an error.