Reading time 4 minutes (approx. 475 words)
In May of this year, the IDW published the so-called short report on the 259th meeting of the Technical Committee for Corporate Reporting (FAB) on March 25.03.2020, XNUMX. This addresses the question of which item in the profit and loss statement non-credit institutions should report negative interest on bank account balances. This topic became relevant due to the increasing number of companies that have to pay negative deposit interest.
In this context, the FAB considers two identification options to be appropriate:
Negative interest can be reported within the financial result (first reporting option). According to the total cost method, this extends to numbers 275 to 2 in Section 9 Paragraph 13 of the German Commercial Code (HGB). In contrast, when using the cost of sales method, which is used less frequently in practice, it can be found in Section 275 Paragraph 3 Numbers 8 to 12 of the German Commercial Code (HGB).
- In this first disclosure variant, the negative interest in the sense of a negative capital transfer fee should be disclosed either in a negative interest income – openly offset in a previous column – in accordance with Section 275 Para. 2 No. 11 HGB (total cost method) or Section 275 Para. 3 No. 10 HGB (cost of sales method).
- Alternatively, a new item can be added to the financial result of the profit and loss account in accordance with Section 265 Paragraph 5 of the German Commercial Code (HGB). This requires that the item is clearly identified and cannot be clearly assigned to any other item.
As a second disclosure option, the FAB considers disclosure under the item “other operating expenses”, i.e. under Section 275 Paragraph 2 No. 8 or Paragraph 3 No. 7 of the German Commercial Code (HGB), to be justifiable depending on the method used, whereby the negative interest is regarded as a custody fee.
Nevertheless, in accordance with the opinions of commentators (see, for example, Hoffmann/Lüdenbach, NWB Commentary on Accounting, Section 275, para. 102a), we consider a third disclosure option to be at least equally acceptable, because there are significant concerns about both of the disclosure methods presented (on the one hand, negative interest is part of the financial result, which speaks against the second disclosure option, and on the other hand, it is not interest income with a negative sign, but leads to payments, expenditure and ultimately expenses, which - in addition to the prohibition on offsetting - speaks against the first disclosure option). It is therefore entirely justifiable to disclose the negative interest under the most obvious item "Interest and similar expenses" (Section 2, Paragraph 1, No. 275 or Paragraph 2, No. 13 of the German Commercial Code).
In summary, non-credit institutions that are charged a "fee" for bank account balances have three disclosure options available to them. The FAB considers disclosure within the financial result and disclosure under "other operating expenses" to be appropriate. We, however, consider disclosure under "interest and similar expenses" to be at least equivalent. Nevertheless, the principle of consistency in presentation must be observed overall. Section 265 Paragraph 1 of the German Commercial Code (HGB) only allows deviations in exceptional cases due to special circumstances, which must be explained and justified in the appendix.
