Intangible Fixed Asset Accounting According to German Commercial Code

Quick Guide on intangible fixed asset accounting according to German Commercial Code

Recognition of Financial Assets

Under the HGB, financial assets are recognized when a company becomes a contractual party. These assets typically comprise equity investments, securities, loans, and other forms of financial investments. They are classified based on their intention of use and can be either current or fixed assets.

Initial Measurement

Financial assets are initially recorded at their acquisition costs. This value includes the purchase price and all associated expenses, such as transaction fees, and excludes interest accrued.

Subsequent Measurement

Fixed Financial Assets: These are typically valued at their acquisition cost. However, the HGB adheres to the lower of cost or market principle. It mandates that if there is a probable and permanent decline in the value of a fixed asset, it must be written down to its lower fair value. In the event of temporary impairment, the asset may be written down to the lower value.

Current Financial Assets: These assets, intended for short-term holding, are evaluated at the lower of cost or market value, ensuring that any decrease in the market value is accounted for in the financial statements.

Depreciation and Impairment

Financial assets are subject to scheduled depreciation, similar to tangible assets, but only if they have a limited useful life. When it comes to impairment, the HGB is conservative, requiring assets to be written down if there is any indication of a permanent reduction in value.


The disposal of financial assets necessitates the removal of the asset from the balance sheet. The difference between the carrying amount and the disposal proceeds is reported in the income statement as a gain or loss.


The HGB requires exhaustive disclosure to ensure transparency. Companies must disclose the accounting policies adopted, the nature and financial impact of each type of financial asset, impairments, and reversals of impairments in their annual report.