Ready for 2026: Overview of key changes from 2026

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Commercial accounting

Overview of amended/new IDW pronouncements (including drafts):

The Institut der Wirtschaftsprüfer (IDW) regularly publishes pronouncements dealing with commercial accounting. The contents are also relevant for companies.

• IDW RS IFA 1:
  The revised IDW statement on the demarcation of maintenance expenses and production costs for buildings in the commercial balance sheet was adopted by the Real Estate Industry Committee (IFA) on November 6, 2024 and acknowledged by the Corporate Reporting Committee (FAB) on November 14, 2024. The reason for the changes is, in particular, the legal obligation to renovate the building stock to be climate-neutral by 2045, which is why such investments should be given greater consideration in the assessment of building quality in the future, which will have an impact on the commercial balance sheet. The revised statement is to be applied for the first time to financial statements for financial years beginning after December 31, 2025. Earlier application is permitted.

• IDW ERS FAB 18 (formerly: IDW RS HFA 18):
  The draft of a statement on the accounting of investments in partnerships in the commercial annual financial statements was adopted by the FAB of the IDW on November 22, 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 disposals (including so-called liquidity distributions) of the partnership at the level of the partner is planned.The regulations on the initial measurement of investments in partnerships are also to be supplemented by the presentation of how to deal with contributions in kind that the partner makes to the investment company. Finally, clarifications regarding other aspects are to be made.
  The statement applies to the preparation of financial statements for periods beginning after June 30, 2025. However, the FAB recommends that the draft already be applied.

• IDW RS FAB 15 (formerly: IDW RS HFA 15):
  The statement on the commercial accounting of emission allowances and GHG quota trading was adopted by the FAB of the IDW on September 25, 2025. It replaces IDW RS HFA 15 from 2006.
  In addition to clarifications in the previous factual scope, additions are planned for the commercial accounting of national emission certificates within the meaning of the Fuel Emission Trading Act (BEHG) as well as greenhouse gas reduction quotas and obligations in accordance with the Federal Immission Control Act (BImSchG). Compared to the draft from November 2024, only a few, mostly clarifying changes or additions have been made, which mostly concern greenhouse gas quotas.
  The statement applies to the preparation of financial statements for financial years beginning after December 31, 2025.

• IDW S 16:
  The standard for the design of early crisis detection and crisis management in accordance with Section 1 StaRUG (Act on the Stabilization and Restructuring Framework for Companies) was adopted by the Restructuring and Insolvency Committee (FAS) on September 8, 2025 and acknowledged by the Main Technical Committee (HFA) on September 26, 2025. At its core, appropriate corporate planning and an appropriate planning process are important. The background is that with § 1 StaRUG, the introduction of early crisis detection and crisis management became mandatory for all limited liability companies.

• IDW ERS FAB 42:
  The FAB of the IDW adopted the draft of an IDW statement on accounting: Effects of a merger on the commercial annual financial statements on November 26, 2025. In addition to the adaptation of the explanations on accounting for cross-border mergers to the new §§ 315 to 319 UmwG, the draft contains, among other things, numerous precisions and clarifications.

• The IDW published a Trendwatch position paper on the topic of “Maintaining prosperity through increasing productivity” on March 21, 2025. This position paper shows the urgency of structural reforms and the need for investments in digitization, education and technology. Accordingly, increasing productivity with a simultaneous decline in the labor force potential or labor supply is central to maintaining prosperity.

• Going Concern & Insolvency: On May 7, 2025, the IDW published a paper with questions and answers on commercial going concern assumption (Going Concern) and insolvency. Frequently asked questions in the context of preparation, creation and auditing are discussed here.

• The IDW published a Trendwatch position paper on the topic of “Fake News” on July 29, 2025. This position paper analyzes the risks posed by fake news and deep fakes and their impact on companies and auditors. Awareness of these risks and strengthening resilience in this regard are essential. Of importance here are, among other things, the implementation of early warning and communication systems for the early detection of fake news attacks as well as training to raise awareness.

• Base interest rate Business Valuation: The Institut der Wirtschaftsprüfer (IDW) announces the base interest rate for Business Valuations according to IDW S 1 i.d.F. 2008 or IDW RS HFA 10 as of December 1, 2025 at 3.25%. The interest rate has thus remained unchanged since October 1, 2025. A value of 3.25% was last reached in October 2011. It is recommended to use this interest rate when carrying out (preliminary) Business Valuations as part of the preparation of the financial statements. On the balance sheet date, an adjustment of the base interest rate in the calculation may be necessary depending on the interest rate development.

• New cost of capital recommendation: The Committee for Business Valuation and Management (FAUB) of the Institut der Wirtschaftsprüfer (IDW) has adjusted its recommendation for the market risk premium. In its meeting on September 16, 2025, the FAUB decided to adjust its recommendation for the market risk premium before personal taxes to 5.25% to 6.75% (previously: 6.00% to 8.00%). Based on the recommendation before personal taxes, the FAUB has also made a transfer to the market risk premium after personal taxes against the background of the current withholding tax system. This leads to a corresponding adjustment of the recommendation for the market risk premium after personal taxes to a range of now 4.50% to 5.75% (previously: 5.00% to 6.50%). The adjustment of the market risk premium was made due to the development of the capital markets, in particular due to the development of the interest rate level and the return expectations on the stock market.

• Corporate tax reform 2025: Through the entry into force of the law for a tax investment immediate program to strengthen Germany as a business location (so-called Growth Booster Act) on July 19, 2025, the gradual reduction of the corporate tax rate from currently 15% to 10% will take place, each by one percentage point per assessment period, starting with the assessment period 2028 (§ 23 para. 1 KStG n.F.). The planned tax reduction has an impact on the accounting of deferred corporate tax of corporate tax-liable legal entities, both in accounting according to German Commercial Code (HGB) and according to IFRS.

• CSRD Implementation Act: The government draft (RegE) of September 3, 2025 contains the planned implementation of the Corporate Sustainability Reporting Directive (CSRD – Directive (EU) 2022/2464) into national law. Essentially, changes in the area of sustainability reporting are planned in the German Commercial Code (HGB-E). However, further changes are also planned, some of which are only partially related to sustainability reporting. These planned changes include:
  • • Written preparation of the annual and consolidated financial statements (§ 245 sentence 1 HGB-E)
    • Reporting on the most important intangible resources in the management report (§ 289 para. 3a HGB-E)
    • “Preparation solution” with regard to the ESEF format of the (consolidated) management report when expanding to include a (consolidated) sustainability report (§§ 289g, 315e HGB-E)
    • Merging the so-called “oaths” through which it is assured in writing that the (consolidated) financial statements and (consolidated) management report give a true and fair view of the actual circumstances, and also expanding to include an assurance regarding the (consolidated) sustainability report (§§ 289h, 315f, 315e HGB-E)
    • The initial application is partially planned to be from the day after the announcement of the final law in the Federal Law Gazette. It is therefore advisable to keep an eye on developments surrounding the national implementation of the CSRD.

IFRS accounting

The following amendments will apply for the first time in the IFRS for financial years from 01.01.2026:

• Amendments to IFRS 9 and IFRS 7: Classification and measurement of financial instruments
• Amendments to IFRS 9 and IFRS 7: Contracts on nature-dependent electricity supply
• Amendments to IAS 7, IFRS 1, IFRS 7, IFRS 9 and IFRS 10: Annual improvements to the IFRS – Volume 11

For detailed information on IFRS and current developments, please read our current article: IFRS Update 2025

• Audit focuses: On October 14, 2025, the joint audit focuses of the European Securities and Markets Authority (ESMA) and the national supervisory authorities of the European Economic Area for the 2025 financial year were published:
• IFRS financial statements
  • Geopolitical risks and uncertainties
  • Segment reporting
  • • Sustainability reporting
      • Materiality considerations in ESRS reports
      • Scope and structure of the report
    • ESEF
      • Common errors in the cash flow statement
    • Likewise, the Federal Financial Supervisory Authority (BaFin) published its additional national audit focus for annual and consolidated financial statements 2025 on November 27, 2025. The focus is on management reporting in the changing macroeconomic environment.
    • The focuses are particularly relevant for capital market-oriented companies and their supervisory boards and auditors in the preparation and auditing of the IFRS financial statements 2025.

• In November 2025, the IASB published illustrative examples of the presentation of uncertainties in financial statements. Even though the examples are based on climate-related scenarios, the underlying principles apply to all types of uncertainties. These are accompanying materials to the IFRS, which are not integral parts of the respective standards. There is therefore no initial application date and there is also no adoption into EU law. However, it is expected that companies will implement any changes in their reporting in a timely manner.

Sustainability reporting

• In connection with the Omnibus I package, the EU Commission issued amendments to the ESRS Set 1 on July 11, 2025 (so-called “Quick Fix”). On November 10, 2025, Delegated Regulation (EU) 2025/1416 was published in the EU Official Journal. The Quick Fix enables companies of the first wave to also make use of certain transitional reliefs in the financial years 2025 and 2026 and extends the Anwenderkreis of certain size-dependent reliefs also to companies with more than 750 employees.

• On July 4, 2025, the delegated regulation to simplify EU taxonomy reporting, also prepared as part of the Omnibus I package, was published by the EU Commission as a draft. The objection period (“Scrutiny Period”) for the delegated legal act was extended by two to a total of six months and now ends on January 5, 2026. In principle, it is planned that the new regulations will already apply for financial years 2025, with the option of continuing to apply the old regulations for 2025.

• A revision of the first set of the European Sustainability Reporting Standards (ESRS) is currently underway. The European Financial Reporting Advisory Group (EFRAG) handed over the final drafts to the EU Commission on December 3, 2025. The finalization of the revision is planned for mid-2026

• The EU Commission is planning comprehensive adjustments to the technical assessment criteria in the delegated acts on the EU Taxonomy Regulation in the area of climate and environment (Delegated Regulations (EU) 2021/2139 and (EU) 2023/2486). For this purpose, a so-called “Call for Evidence” was published, in which stakeholders can submit feedback and suggestions for increasing user-friendliness and simplification for four weeks. The deadline ended on December 5, 2025. It is planned to finalize or adopt the revised delegated legal acts in the 2nd quarter of 2026.

• After the European Parliament adopted its negotiating position on the simplification of sustainability reporting and due diligence for companies on November 13, 2025, the trilogue negotiations between the EU Commission, the EU Parliament and the EU Council of Ministers started on November 18, 2025 and were concluded on December 16, 2025. In the future, only companies with more than 1,000 employees and more than €450 million in annual net sales revenue will have to submit a CSRD-compliant sustainability report including reporting in accordance with Art. 8 EU Taxonomy Regulation. The final directive text still has to be published in the Official Journal of the EU and will then come into force.

For detailed information on sustainability reporting and current developments, please read our current article: Sustainability Reporting 2026

IT security

• NIS-2: The Directive on measures for a high common level of security of network and information systems in the Union (NIS-2) aims to ensure a high level of cybersecurity across the EU by public bodies and companies. Member States had until October 17, 2024, to transpose the Directive into national law. The German Bundestag has now passed the NIS-2 Implementation Act on November 13, 2025. It was published on December 5, 2025, in the Federal Law Gazette (2025 I No. 301).

Governance, Risk & Compliance

• In September 2025, the German Corporate Governance Code Government Commission published a practical impulse on the topic of “Use of Artificial Intelligence in the Supervisory Board.” The impulse contains a proposal to expand the use of Artificial Intelligence (AI) in three stages, from taking over routine tasks to strategic sparring. An early examination of the topic of AI is recommended to increase the quality of the work of the supervisory board.