For many international companies, preparing annual financial statements under German commercial law (HGB) is a burdensome compliance obligation that adds no value for managing the business, because the KPIs used for management purposes are defined on the basis of international group GAAP (e.g., IFRS, US GAAP, J-GAAP).
However, extensive preparation, audit, and disclosure requirements continue to apply in Germany, making it necessary to prepare financial statements in accordance with German commercial law.
Employees of German subsidiaries of international companies are often less familiar with the requirements of German commercial law, as they primarily have to apply and report under the group's accounting standards (IFRS, US GAAP, China GAAP, etc.). Alternatively, the local country entity is supported entirely by an internal shared service center abroad that