Term · Accounting & Data Quality
HGB (German Commercial Code)
In briefThe HGB is the German commercial-law basis of accounting, above all for the single-entity financial statements. Many smaller German issuers continue to prepare their single-entity accounts under it, while the group reports under IFRS.
Definition
German commercial-law accounting basis, in particular for single-entity financial statements.
How it is calculated
Formula. Not a metric – an accounting framework.
Why it matters for small caps
Many smaller German issuers still prepare their single-entity financial statements under the HGB, even where the consolidated financial statements are prepared under IFRS.
Common misreadings
- It is equated with IFRS, although the HGB tends to measure more conservatively (e.g. stricter prohibitions on capitalisation).
In the process
Frequently asked
What is the HGB?
It is the German Commercial Code (Handelsgesetzbuch), the framework for commercial-law accounting. It is authoritative in particular for the single-entity financial statements.
When is the HGB relevant?
For German small caps it is worth checking whether the single-entity accounts are prepared under HGB and the consolidated accounts under IFRS. The two frameworks lead to different carrying amounts.
How does HGB differ from IFRS?
The HGB tends to measure more conservatively, for example through stricter prohibitions on capitalisation. Anyone who equates the two compares metrics on a different basis.
Related terms
Sources
Primary
Bundesministerium der Justiz – Handelsgesetzbuch (HGB)
https://www.gesetze-im-internet.de/hgb/
https://www.gesetze-im-internet.de/hgb/
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.