Journal de l'économie mondiale

Useful Trends of German Current Value Accounting?

Abstract

Andreas Haaker and Patrick Velte

The rational management of the current value accounting according to the fair value concept is one of the major problems. The history of current value accounting in Germany has not been researched very well yet. Although, some aspects of history would certainly provide new insight into the recent developments that led to a strengthening of the fair value measurement. The “modern” fair value concept increasingly applied in the International Financial Reporting Standards (IFRS) was already known and used in Germany in the 19th century. Based on the experience of the founder crisis the fair value concept was abolished in 1884 while at the same time the acquisition cost principle was introduced. It was precisely during the recent financial crisis that fair value accounting was (re-)introduced into the German accounting law, although it is likely that this concept negatively affected the crisis. In this paper the history of current value accounting in Germany will be discussed against the background of these contradictions. We also focus the accounting modernization in Germany during the financial crisis in 2009, as well as a comparative tax-related evaluation of the fair-value concept.