Financial Accounting

3Financial statements according to Commercial Code

3.1Balance sheet

First the legal structure of the balance sheet is explained; then the different balance sheet items are explained in detail focusing on recognition, measurement and presentation.

3.1.1Structure

For proprietorships and partnerships, the Commercial Code prescribes only a very basic structure (§ 247):

Tab. 3.1: Basic structure of a balance sheet (§ 247).

Debit	Balance sheet		Credit
Non-current assets	Equity
Current assets	Liabilities
Deferred expenses	Deferred income

Further detailing to fulfil the GAAP, in particular the principle of clarity and transparency, is up to the judgement of the reporting unit. Once a structure has been decided upon, it should be kept constant (principle ...