GAS 22 - Group Equity

• Adopted by the Accounting Standards Committee of Germany (ASCG) on 25 September 2015. Publication of the authoritative German version by the Federal Ministry of Justice and Consumer Protection under section 342(2) of the HGB on 23 February 2016.
• Revised paragraph 5 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 requirements for the presentation of the composition of and changes in group equity in the statement of changes in group equity in accordance with section 297(1) of the HGB. It also sets out more detailed guidance on the requirements of German commercial law relating to selected items of group equity.

The Standard applies to parent entities which are required to prepare consolidated financial statements in compliance with the HGB or the PublG. Entities that are required to supplement their annual financial statements by a statement of changes in equity or that prepare a statement of changes in equity voluntarily are encouraged to do so in accordance with this Standard.

Changes in equity are required to be presented in the statement of changes in group equity separately for the parent entity and for non-controlling interests. The template contained in Appendix 1 (for corporations) or Appendix 2 (for commercial partnerships) to this Standard is required to be applied when preparing the statement of changes in group equity, provided that the matters presented there are relevant; section 265(8) in conjunction with section 298(1) of the HGB is not affected by this requirement.

Changes in the following items of group equity are generally required to be presented for parent entities with the legal form of a corporation: subscribed capital, treasury shares, uncalled unpaid capital, capital reserves, revenue reserves, retained profits/accumulated losses brought forward, consolidated net income/net loss for the financial year and currency translation differences, where these items are attributable to the shareholders of the parent, as well as non-controlling interests.

The items of the statement of changes in group equity presented for parent entities with the legal form of a commercial partnership comprise capital shares, reserves (where relevant), retained profits/accumulated losses brought forward, consolidated net income/net loss for the financial year, currency translation differences and non-controlling interests.

The structure of the statement of changes in group equity is always governed by the legal form of the parent entity.

In the case of non-controlling interests, the separate presentation of consolidated net income/net loss for the financial year and currency translation differences attributable to the non-controlling interests is encouraged.

Statements of changes in group equity are prepared on the basis of the accounting and the consolidated financial statements derived from the accounting in accordance with the principles of German GAAP. It must be possible to reconcile the equity accounts presented in the statement of changes in group equity with the corresponding line items in the consolidated balance sheet.

Changes in group equity must be presented gross.

The Standard addresses selected issues that are not governed by statute law or that require interpretation and that affect the presentation of group equity. This applies in particular to the accounting for treasury shares and shares of a subsidiary in its parent entity in the consolidated financial statements, as well as the special requirements for presenting group equity in the case of commercial partnerships within the meaning of section 264a of the HGB. The focus of the Standard is on issues relating to presentation.

As far as the accounting for treasury shares is concerned, the Standard addresses in particular issues relating to the offsetting of amounts against reserves in connection with the purchase and disposal of treasury shares. This takes into consideration the specific characteristics of consolidated financial statements compared with annual financial statements, namely the fact that they do not have the function of measuring distributions to owners. For example, the Standard clarifies that offsetting the difference between the par or notional value of treasury shares and their cost in consolidated financial statements in accordance with section 272(1a) in conjunction with section 298(1) of the HGB is not limited to the distributable reserves. The Standard also requires compliance with the principle of consistency when offsetting amounts against reserves in accordance with section 272(1a) and (1b) in conjunction with section 298(1) of the HGB.

Of the requirements contained in the Standard that govern the presentation of group equity in the case of commercial partnerships within the meaning of section 264a of the HGB, the issue of the presentation of the net income/net loss of the parent entity and of the subsidiaries included in the consolidated financial statements is particularly important in the consolidated financial statements of a commercial partnership. The Standard sets out that the capital shares of the partners and the liabilities to the limited partners are to be presented in the consolidated financial statements of a parent entity with the legal form of a commercial partnership in the same amount as they are reported in its annual financial statements. This approach is addressed in detail in the Standard, explained in the Basis for Conclusions and illustrated using examples in Appendix 3 to the Standard.

This Standard must be applied for the first time for financial years beginning after 31 December 2016. Earlier application in full is permitted and encouraged.