Handelsgesetzbuch (HGB) is a law that governs the primary commercial code for companies in Germany. The law includes a regulation related to the preparation of financial statements and establishes accounting guidelines and best practices. HGB is similar to generally accepted accounting principles (GAAP), which is followed in the United States.
The commercial code of Germany, known as Handelsgesetzbuch, was first established on May 10, 1897. In 1998, the code was adapted to conform to new laws within the European community.
The HGB has also been used in Austria since 1938. In 2007, the HGB in Austria was replaced by a newer unified commercial code called the Unternehmensgesetzbuch (UGB). German accounting law was further updated in 2010 with the Bilanzrechtsmodernisierungsgesetz (BilMoG).
HGB includes the governance on the registration of companies in Germany and the ordinances they must adhere to. For example, HGB includes provisions on the use of commercial brokers, agents, and the formation and dissolution of partnerships with third parties.
The mandates of HGB …