BaFin

Topic Financial reporting Financial reporting

With the European Transparency Directive Amending Directive (2013/50/EU), the European Transparency Directive (2004/109/EC) was revised. The German Act Implementing the Transparency irective Amending Directive as published in the announcement of 25 November 2015 (Federal Law Gazette I p. 2029) came into force on 26 November 2015.

In the following the term “financial report” applies to accounting documents pursuant to section 114 (2) of the WpHG, the half-yearly financial report pursuant to section 115 of the WpHG, where applicable in conjunction with section 117 of the WpHG, and the payments report or group payments report pursuant to section 116 of the WpHG. Pursuant to sections 114 et seq. of the German Securities Trading Act (WertpapierhandelsgesetzWpHG), issuers must generally still meet the following periodic financial reporting requirements:

  • publish an announcement, stating the date and the website on which the financial report is being made publicly available, by passing on said announcement to the media for Europe-wide dissemination;
  • notify BaFin of the announcement;
  • make the financial report publicly available online;
  • transmit the announcement and the corresponding financial report to the company register for storage there.

In accordance with section 114 (2) of the WpHG, annual financial reports must include the annual financial statements, the management report, a responsibility statement pursuant to section 264 (2) sentence 3 and section 289 (1) sentence 5 of the German Commercial Code (HandelsgesetzbuchHGB) and, where applicable, a certificate of registration of the auditor issued by the Chamber of German Public Auditors (Wirtschaftsprüferkammer) pursuant to section 134 (2a) of the Act on the Profession of Auditors (Wirtschaftsprüferordnung – WPO) or a certification of exemption from the registration obligation issued by the Chamber of German Public Auditors pursuant to section 134 (4) sentence 8 of the WPO.

If consolidated financial statements and a group management report are to be prepared by a parent company, section 114 is modified by section 117 no. 1 of the WpHG to the effect that the annual financial report must include, in addition to the aforementioned documents, the audited consolidated financial statements prepared pursuant to Regulation (EC) No 1606/2002, the consolidated management report, a corresponding statement in accordance with the provisions of section 297 (2) sentence 4 and section 315 (1) sentence 6 of the HGB and, where applicable, a certificate of registration of the auditor issued by the Chamber of German Public Auditors pursuant to section 134 (2a) of the WPO or a certification of exemption from the registration obligation issued by the Chamber of German Public Auditors pursuant to section 134 (4) sentence 8 of the WPO.

Pursuant to section 115 (2) of the WpHG, the half-yearly financial reports must include the condensed set of financial statements, the interim management report and a corresponding statement in accordance with the provisions of section 264 (2) sentence 3 and section 289 (1) sentence 5 of the HGB.

If a parent company is obliged to prepare consolidated financial statements and a group management report, sections 115 to 117 no. 2 of the WpHG are modified to the effect that the legal representatives of the parent company are to prepare and publish the half yearly financial report for the parent company and all the subsidiaries to be included in the consolidation. A separate condensed set of financial statements or interim management report for the parent company are not necessary.

Changes to financial reporting requirements

Content of the changes to financial reporting requirements for publicly traded companies based on the aforementioned Act Implementing the Transparency Directive Amending Directive (2013/50/EU):

  1. The obligation to prepare and publish interim management statements for issuers of shares has now been lifted (section 37x of the WpHG, old version).
  2. A new fundamental obligation applies to companies that have activities in the extractive or logging of primary forest industries - they now need to publish an annual payments report or consolidated payments report. This obligation applies for the first time to the business year beginning after 26 November 2015. The payments report is to be made available to the public no later than six months after the end of the reporting period (section 116 of the WpHG).
  3. Pursuant to section 1 (3) of the WpHG, financial reporting requirements in accordance with chapter 11 of the WpHG do not apply to issuers of units or shares of open-ended investment funds.
  4. The legislature has now clarified that the publication of announcements must take place within the same period that also applies to the respective financial report being made available to the public: the relevant announcement regarding the annual financial report or the accounting documents as specified in section 114 (2) of the WpHG is to be published no later than four months after the reporting period has elapsed and prior to the annual financial report being made publicly available; the relevant announcement regarding the half-yearly financial report is to be published no later than three months after the reporting period has elapsed and prior to the half-yearly financial report being made publicly available; the relevant announcement regarding the payments report or consolidated payments report is to be published no later than six months after the reporting period has elapsed and prior to the payments report or consolidated payments report being made publicly available.
  5. Pursuant to section 114 (2) no. 1 (a) and (2) no. 2 (a) of the WpHG, the annual financial report of a domestic issuer domiciled in a member state of the European Union or another signatory to the Agreement on the European Economic Area must include annual financial statements and a management report prepared and audited in accordance with the rules applicable in their country of domicile.
  6. Pursuant to section 114 (2) no. 1 (b) and (2) no. 2 (b) of the WpHG, the annual financial report of a domestic issuer domiciled in a third country must include annual financial statements prepared and audited in accordance with the requirements set out in the HGB, together with the auditors' report or the non-affirmative auditors' report, and the management report prepared and audited in accordance with the requirements set out in the HGB.
  7. The publication period for half-yearly financial reports has been extended from two to three months following the end of the reporting period.
updated on: 18.01.2018

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