New German GAAP — The Gap Between Commercial and Tax Accounting

If German tax law was a river flowing over all businesstransactions and commercial accounting, thelast words of Norman Maclean in A River Runs ThroughIt best suit the traditional relationship between commercialand tax accounting. For more than 100 yearsthe principle of strict book-tax conformity (or the authoritativeprinciple, or Maβgeblichkeitsprinzip) was themost striking feature of German tax accounting. Infact, since the enactment of the German CommercialCode (Handelsgesetzbuch, or HGB) on January 1,1900, this principle was a pillar that survived all stormsof reforms until the last reform, the Accounting ModernizationAct (Bilanzmodernisierungsgesetz) went intoforce on May 29, 2009.[...]