(1) At a maximum, assets are to be recognised at their cost of acquisition or at their production cost, minus the depreciations pursuant to subsections (3) to (5). Liabilities are to be recognised at the amount of the performance of the obligation and provisions are to be recognised at the amount that, when assessed exercising reasonable business judgment, will be necessary to settle the liability. Insofar as the amount of old-age pension scheme obligations exclusively is determined based on the fair value of investment securities within the meaning of section 266 (2) A. III. 5, provisions are to be recognised at the fair value of said investment securities, insofar as said value exceeds a guaranteed minimum amount. Assets to be set off pursuant to section 246 (2) sentence 2 are to be valued at their fair value. Micro share capital companies (section 267a) may base valuations on the fair value only if they have not taken recourse to any of the eased requirements provided for by section 264 (1) sentence 5 section 266 (1) sentence 4 section 275 (5) and section 326 (2). Where a micro share capital company takes recourse to at least one of the eased requirements set out in sentence 5, the assets are to be valued pursuant to sentence 1, also where offsetting is to be performed pursuant to section 246 (2) sentence 2.
(2) Provisions having a remaining term of more than one year are to be discounted at the market interest rate corresponding to their remaining term, averaged over the preceding ten financial years in the case of provisions formed for old-age pension scheme obligations, and averaged over the preceding seven financial years in the case of provisions formed for other purposes. In derogation from sentence 1, provisions for old-age pension scheme obligations or comparable obligations falling due in the long term may be discounted at a blanket rate, this being the average market interest rate resulting if a remaining term of 15 years is assumed. Sentences 1 and 2 apply accordingly to liabilities based on pension obligations for which no counterperformance is to be expected going forward. Deutsche Bundesbank defines the discounting rate to be applied pursuant to sentences 1 and 2, subject to the stipulations of a statutory instrument, and discloses it at monthly intervals. In the statutory instrument pursuant to sentence 4, which is not subject to approval by the Bundesrat, the Federal Ministry of Justice determines, after having consulted with Deutsche Bundesbank, the details of defining the discounting rates, particularly the methods used for such definition and their foundations, as well as the form in which they are to be published by notice.
(3) In reporting assets forming part of the fixed assets, the use of which is limited in time, the cost of acquisition or the production cost is to be reduced by scheduled depreciations. The schedule must allocate the cost of acquisition or production cost to those financial years in which it foreseeably will be possible to use the asset. If it is not possible, in exceptional cases, to reliably estimate the foreseeable useful life of an intangible asset created by the enterprise itself and forming part of the fixed assets, then the schedule is to provide for a depreciation of the production cost over a period of ten years. Sentence 3 applies accordingly to goodwill acquired for valuable consideration. Regardless of whether the useful life of any assets forming part of the fixed assets is limited in time, unscheduled depreciations are to be performed for these assets if a permanent impairment of their value is to be expected, in order to recognise them at the lower value attributable to them as per the balance sheet date. In the case of financial assets, unscheduled depreciations may be performed also in the event of a value impairment that is not expected to be permanent.
(4) Depreciations are to be performed for assets reported under current assets in order to recognise them at a lower value where this results from their trading price or market price as given on the balance sheet date. Where it is not possible to determine a trading price or market price and where the cost of acquisition or production cost exceeds the value attributable to the assets on the balance sheet date, the depreciation is to be performed such that it reflects that value.
(5) A value recognised at a lower rate pursuant to subsection (3) sentence 5 or 6 and pursuant to subsection (4) may not be upheld if the grounds for which it was applied have ceased to exist. A value recognised at a lower rate for goodwill acquired for valuable consideration is to be upheld.
(6) In the case of provisions formed for old-age pension scheme obligations, the difference between the value recognised for the provisions based on the corresponding market interest rate averaged over the preceding ten financial years and the value recognised for the provisions based on the corresponding market interest rate averaged over the preceding seven financial years is to be identified in every financial year. Profits may be distributed only if the reserves remaining freely disposable after the distribution, plus the accumulated profits carried forward and minus the accumulated losses carried forward, correspond at a minimum to the difference pursuant to sentence 1. The difference pursuant to sentence 1 is to be presented in every financial year in the notes or at the foot of the balance sheet.