Under what circumstance should a German company prepare its financial statements under German GAAP rather than international financial reporting standards?

Question

Quizplus · Accepted Answer

German companies should prepare their financial statements under German GAAP for tax purposes as the tax laws in Germany require certain specific disclosures and accounting treatments that may not be covered by IFRS. Reporting to banks and preparing consolidated financial statements can be done under both German GAAP and IFRS, but calculating tax requires adherence to German GAAP. The option D is incorrect as IFRS is increasingly becoming the global standard and may be mandated for reporting by regulatory bodies or required by investors.

Under What Circumstance Should a German Company Prepare Its Financial