balance sheet identity

The balance sheet is defined as the balance sheet in accordance with section 252 (1) no. 1 HGB, which stipulates that the values ​​for the investment and working capital of the company may not differ from the last year's balance sheet in the opening balance sheet.

This double-headedness of the balance sheet is intended to prevent companies from showing an incorrect profit. They could fake a bigger total value, thereby gaining advantages in negotiations with business partners or in the case of mergers or, on the other hand, declaring too low profits against the financial office.

A breach of the balance sheet identity is permissible only in justified exceptional cases, which are regulated in § 252 paragraph 2 HGB

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