Question

Explain, using several different accounting topics, in what ways domestic German accounting rules are more conservative than IFRS.

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Accounting in Europe
Volume 1, 2004 - Issue 1

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Original Articles

The Adaptation of German Accounting Rules to IFRS: A Legislative Balancing Act

Axel Haller  &Brigitte Eierle
Pages 27-50 | Published online: 08 Feb 2011

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https://doi.org/10.1080/0963818042000262793

ABSTRACT

The accounting strategy of the EU Commission for the last ten years, which reached one of its goals with the Regulation on IAS, is challenging all EU Member States. This article gives an analytical insight into the way the German legislator has confronted this challenge. It explains the statutory changes introduced to adapt the accounting regime in Germany, against the background of arguments for reform and proposals which have been put forward in the German accounting literature and by influential interest groups. The major characteristics of the government's accounting strategy are analysed: an increasing focus on the macroeconomic benefits of adequate accounting regulations, a perception of accounting as a material part of the corporate governance regime, greater weight given to the notion of public interest and the information function of accounting, a focus on consolidated accounts for the revision of existing rules, and, at the same time, considerable reluctance to change any recognition and measurement rules for individual entity accounts. In general the accounting reform strategy of the German government can be characterized as being slow, conservative and reactive, following a marginal step-by-step approach