Ready for 2025: Overview of key changes from 2025

published on 10 December 2024 | reading time approx. 8 minutes

The new year 2025 holds a number of changes in store for companies that need to be considered and their impact assessed. The following explanations provide an overview of selected relevant changes in the areas of German GAAP (HGB) and IFRS accounting, group auditing, ESG reporting and auditing, IT security and governance, risk and compliance issues, thus offering a framework for preparing for the new year.

German GAAP accounting (HGB) »
IFRS accounting »
Audit of consolidated financial statements »
ESG Reporting »
IT Security »
Governance, Risk & Compliance »
Other Topics »

We compiled all topics in an tabular overview for you to download! To our checklist “Ready for 2025” »

German GAAP accounting (HGB)

Overview of amended/new IDW pronouncements (incl. Drafts):

The Institute of Public Auditors in Germany (IDW) regularly publishes pronouncements dealing with accounting under commercial law. The content is also relevant for companies.

IDW RS FAB 5 (formerly: IDW RS HFA 5):
The statement on the accounting of foundations was revised due to the reform of private foundation law and adopted on 28 August 2024. With regard to accounting, the structure and items of the foundation's assets and equity in particular were regulated uniformly across Germany for the first time.
To the article IDW RS FAB 5 (in German) »

IDW RS FAB 41 (formerly: IDW RS HFA 41 n.F.):
The amended statement on the effects of a change of legal form on the annual financial statements under German GAAP (HGB) was adopted on 16 May 2024. In particular, commercial accounting issues in connection with cross-border changes of legal form of corporations within the EU or the EEA were revised. It is to be applied for the first time to all changes of legal form based on a change of legal form resolution passed after 31 July 2024.
To the article IDW RS FAB 41 (in German) »

IDW ERS FAB 15 (formerly: IDW RS HFA 15):
The draft statement on accounting for emission allowances and GHG quota trading under German GAAP (HGB) was adopted by the IDW's Financial Reporting Committee (FAB) on 22 November 2024. In addition to clarifications in the previous material scope of application, additions are provided for the accounting under HGB of national emission allowances within the meaning of the BEHG and greenhouse gas reduction quotas and obligations in accordance with the BImSchG. The statement applies to the preparation of financial statements for financial years beginning after 31 December 2025. However, the FAB recommends that the draft should already be applied.
Further information (in German): Neufassung von IDW RS HFA 15 zur handelsrechtlichen Bilanzierung von Emissionsberechtigungen und des THG-Quotenhandels als Entwurf verabschiedet | IDW

IDW ERS FAB 18 (formerly: IDW RS HFA 18):

The draft statement on accounting for investments in trading partnerships in the annual financial statements under German GAAP (HGB) was adopted by the IDW's Financial Reporting Committee (FAB) on 22 November 2024. The draft takes into account adjustments and additions that have become necessary as a result of the changed legal situation (due to the MoPeG and the KöMoG). In addition, a revision of the explanations on the accounting treatment of asset distributions (including so-called liquidity distributions) of the commercial partnership at shareholder level is planned.
The regulations on the initial valuation of investments in commercial partnerships are also to be supplemented by a description of the treatment of non-cash contributions made by the shareholder to the partnership. Finally, clarifications are to be made regarding other aspects.
The statement applies to the preparation of financial statements for periods beginning after 30 June 2025. However, the FAB recommends that the draft should already be applied.
Further information (in German): Bilanzierung von Beteiligungen an Personenhandelsgesellschaften: Neufassung von IDW RS HFA 18 als Entwurf verabschiedet | IDW

IDW ERS FAB 7 (formerly: IDW RS HFA 7 n.F.):
The draft of a new version of the statement on German GAAP (HGB) accounting for commercial partnerships was published on 17 June 2024. The amendments were prompted in particular by the laws on the modernisation of partnership law (MoPeG) and corporation tax law (KöMoG). The new Section 1a of the German Corporation Tax Act (KStG) on opting for corporate taxation may have an impact on the accounting of the opting company under commercial law. The revised statement is to be applied for the first time to financial years beginning after 31 December 2024. No final version is currently available.
To the article IDW ERS FAB 7 (in German) »
IDW RS IFA 1:
The revised IDW Statement on Accounting: Deferral of maintenance expenses and production costs for buildings in the commercial balance sheet (IDW RS IFA 1 n.F.) was adopted by the Real Estate Industry Committee (IFA) on November 6, 2024 and approved by the Financial Reporting Committee (FAB) on November 14, 2024. The main reason for the changes is the legal obligation to achieve climate-neutral refurbishment of the building stock by 2045, which is why such investments are to be given greater consideration in the assessment of building quality in future, resulting in effects on the commercial balance sheet. IDW RS IFA 1 n.F. is to be applied for the first time to financial statements for financial years beginning after December 31, 2025. Earlier application is permitted.
To the article IDW RS IFA 1 (in German) »

On 12 February 2024, the IDW published guidance on dealing with risks arising from the development of the properts markets. The construction and property industry remains under pressure due to rising financing interest rates, material costs and delays in the supply chain, among other things. The guidance includes, in particular, information on the valuation of property, the impact of developments and events occurring after the reporting date on the financial statements under German GAAP (HGB), risk provisioning at banks and the valuation of investments in property.
Further information: Der Immobilienmarkt im Umbruch: Ursachen, Risiken und Potenziale in Deutschland auf einen Blick (in German) »

DRÄS 14:
On 28 May 2024, the German Accounting Standards Committee (DRSC) adopted German Accounting Standard Amendment No. 14 (DRÄS 14) with amendments to DRS 18 ‘Deferred Taxes’. DRS 18 will be renamed ‘Deferred Taxes in Consolidated Financial Statements’ and adapted to the amendments to the German Commercial Code by the Minimum Taxation Directive Implementation Act (MinBestRL-Umsetzungsgesetz, MinBestRL-UmsG of 27 December 2023). The revised standard is to be applied for the first time for financial years ending after 28 December 2023 or after 30 December 2023 (relates to paragraphs 66, 67 and 67a).
Further information:
DRSC verabschiedet DRÄS 14 • DRSC Website (in German)
Pillar 2: Die Mindestbesteuerung ist nun Realität! (in German) »

New size criteria/thresholds:
The commercial law thresholds for total assets and revenue have each been raised by 25 per cent. These new thresholds are mandatory for financial years beginning after 31 December 2023. This means for financial years with the same calendar year from 1 January 2024. Companies should check in the course of the 2024 financial statement preparation process whether there are any changes for the respective financial statements.
Further information: Anhebung der Schwellenwerte für die Bestimmung von rechnungslegungsbezogenen Größenklassen und größenabhängigen Befreiungen (in German) »

Base rate for business valuations:
The Institute of Public Auditors in Germany (IDW) has set the base rate for business valuations in accordance with IDW S 1 in the 2008 version and IDW RS HFA 10 at 2.50 % as at 1 December 2024. The interest rate has thus remained unchanged since 1 February 2024. It is advisable to apply this interest rate when carrying out (interim) company valuations when preparing the financial statements. Depending on the development of interest rates, the base interest rate may need to be adjusted in the calculation at the reporting date.
More on the topic of capital costs in company valuation: Cost of Capital in Business Valuation – Comparison of Standards in the DACH Region »

Shortened retention period for invoices (Bureaucracy Relief Act IV):
From 1 January 2025, the shortened retention period for invoices will apply. The period will be reduced from 10 to 8 years. In principle, this applies to all accounting documents whose previous retention period of 10 years has not yet expired by 1 January 2025. Companies that are subject to financial supervision by the Federal Financial Supervisory Authority (BaFin) can only take advantage of the shortened period from 1 January 2026. The shortening of the retention obligation must be taken into account when calculating a corresponding provision in the financial statement preparation process, as this reduces the expected expenses for the retention of business documents.
More on this topic: Bundesregierung strebt Förderung der Digitalisierung an (in German) »

IFRS accounting

The following amendments to IFRS are mandatory for the first time for financial years beginning on or after 1 January 2025:

Amendments to IAS 1:
- Classification of liabilities as current or non-current (incl. deferral of the date of initial application) and
- Non-current liabilities with covenants
Amendments to IFRS 16: Lease liability in a sale and leaseback transaction
Amendments to IAS 7 and IFRS 7: Supplier Financing Arrangements

A detailed description of these and other future amendments to IFRS can be found in our IFRS article »

Key audit areas:
On 24 October 2024, the joint audit priorities of the European Securities and Markets Authority (ESMA) and the national supervisory authorities of the European Economic Area for the 2024 financial year were published. The German Federal Financial Supervisory Authority (BaFin) also published its additional national key audit matters for consolidated financial statements 2024 on 7 November 2024. The focus areas are particularly relevant for capital market-oriented companies and their supervisory boards and auditors when preparing and auditing the 2024 IFRS financial statements.
To the article key audit areas »

Audit of consolidated financial statements

ISA [DE] 600 (Revised):
The first-time application of ISA [DE] 600 (Revised) ‘Special considerations – Audits of consolidated financial statements (including the work of component auditors)’ for the audit of financial statements for periods beginning on or after 15 December 2024 results in increased requirements for the performance of audits of consolidated financial statements and potentially additional work on all sides. to additional work on all sides.
To the article ISA [DE]600 (Revised) »

ESG Reporting

CSR Directive Implementation Act:
The adoption of the implementation act by the end of 2024 is uncertain following the coalition's exit in Berlin. Without implementation, the current legal framework in Germany will continue to apply. The ESRS are therefore not mandatory for the time being, but voluntary application is possible. It remains to be seen how the legislative process will develop.
To the article CSRD Roadmap 2025 »
ESRS module announcement:

The Expert Committee on Corporate Reporting (FAB) of the Institute of Public Auditors in Germany (IDW) has published an ESRS module announcement (IDW RS FAB 100) containing selected and particularly relevant issues. The first five modules were adopted as final versions on 28 August 2024. Further modules are available as drafts. The issues include, for example, the inclusion of affected stakeholders in the materiali-ty analysis in accordance with ESRS (ESRS 1-M1.2).
This is intended to support companies and auditors in the uniform interpretation and application of the standards.
To the article IDW module announcement on sustainability reporting »

IT security

NIS-2:
The Directive concerning measures to ensure a high common level of security of network and information systems across the Union (NIS-2) aims to ensure that public sector bodies and companies maintain a high level of cybersecurity throughout the EU. The member states had until 17 October 2024 to transpose the directive into national law. In Germany, the federal government's draft bill for the implementation law has been available since 2 October, but the actual implementation is still pending.
To the article NIS2 implementation act »

Digital Operational Resilience Act (DORA):
DORA aims to strengthen digital operational resilience in the financial sector. The EU regulation comes into force on 17 January 2025 and aims to ensure that financial companies and third-party ICT service providers in the EU are able to cope with and recover from cyberattacks and other ICT-related disruptions.
To the article DORA »

Governance, Risk & Compliance

EU AML legislative package:
As part of the EU legislative package to combat money laundering and terrorist financing (EU AML package), the European Parliament has adopted fundamental legal and regulatory changes to strengthen the control and harmonization of measures to prevent and combat money laundering and terrorist financing. The package was published in the Official Journal of the EU on 19 June 2024.
To the article EU AML legislative package »

Early crisis detection:
Since 1 January 2024, companies of all legal forms have been obliged to set up an early crisis detection system in accordance with Section 1 StaRUG. The type and scope of the measures to be set up depend on the individual risk situation of the company concerned. The legislator has deliberately refrained from specifying the structure. This is left to the discretion of the Management Board or management. If necessary, the measures should be adjusted or further developed in the new year in order to take into account the findings from the first year of implementation.
More information on Risk management systems »