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Glossary entry

German term or phrase:

zum Nennwert bzw. dem beizulegenden niedrigeren Wert

English translation:

at their principal amount or the lower of cost or market value

Added to glossary by Sebastian Witte
Apr 7, 2023 10:01
1 yr ago
32 viewers *
German term

beizulegender niedrigerer Wert

German to English Bus/Financial Accounting
This is from annual financial statements.

DE:
Bilanzierungs- und Bewertungsgrundsätze
[…] Die Forderungen und sonstigen Vermögensgegenstände sind, ebenso wie die Guthaben bei Kreditinstituten und die Kassenbestände ***zum Nennwert bzw. dem am Bilanzstichtag beizulegenden niedrigeren Wert** angesetzt.

I need help with the expression "zum Nennwert bzw. dem am Bilanzstichtag beizulegenden niedrigeren Wert".

Best regards,
Proposed translations (English)
5 +1 lower of cost or market value
3 +3 at the lower of nominal value or fair value as at the balance sheet date
3 lower fair value

Proposed translations

+1
7 hrs
Selected

lower of cost or market value

As I was told my name was being taken in vain :-) I thought I'd better take a look at this. First, this seems to be German GAAP not IFRSs, e.g. the German talks of "Vermögensgegenstände" not "Vermögenswerte". Secondly, there is no fair value involved here. German GAAP only allows fair value to be used in highly ring-fenced situations, basically financial instruments. So it's perfectly correct to use "lower of cost or market value" here, as per my 2007 explanation (so old!). Third, the "Nennwert" of these current assets is their "principal amount".
This gives: "at their principal amount or the lower of cost or market value at the reporting date".

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Note added at 8 hrs (2023-04-07 18:08:37 GMT)
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And like I answered to Steffen, "fair value" is "beizulegender Zeitwert", and there's no "Zeit" here, so no fair value. I agree it's confusing, but not actually ambiguous once you take a closer look at the component words of the phrase.
Peer comment(s):
agree Steffen Walter : Sebastian confirmed mid-way through this sequence of answers and comments that it's HGB/German GAAP, so you are absolutely right.
22 mins
Something went wrong...
4 KudoZ points awarded for this answer. Comment: "=> at their principal amount or the lower of cost or market value at the reporting date"
44 mins

lower fair value

... reported ... at the lower of carrying value or fair value
Peer comment(s):
neutral Steffen Walter : "Nennwert" (nominal amount/value) is not the same as "carrying value" (Buchwert).
5 mins
Something went wrong...
+3
51 mins
German term (edited): zum Nennwert bzw. dem am Bilanzstichtag beizulegenden niedrigeren Wert

at the lower of nominal value or fair value as at the balance sheet date

This is how I'd word the entire phrase.

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Note added at 54 mins (2023-04-07 10:56:51 GMT)
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angesetzt = recognised/carried

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Note added at 1 hr (2023-04-07 11:06:02 GMT)
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On a related note, the "beizulegender niedrigerer Wert" according to HGB (is this about HGB accounting/German GAAP?) is not the same as the "beizulegender Zeitwert" (fair value).

Compare

https://www.gesetze-im-internet.de/hgb/__253.html
"(4) Bei Vermögensgegenständen des Umlaufvermögens sind Abschreibungen vorzunehmen, um diese mit einem niedrigeren Wert anzusetzen, der sich aus einem Börsen- oder Marktpreis am Abschlussstichtag ergibt."

and

https://www.gesetze-im-internet.de/englisch_hgb/englisch_hgb...
"(4) Depreciations are to be performed for assets reported under current assets in order to recognise them at a lower value where this results from their trading price or market price as given on the balance sheet date."). Hence, "at the lower of nominal value or market (value) as at the balance sheet date".
Note from asker:
Yes, it's HGB accounting, German GAAP.
Peer comment(s):
agree Ted Wozniak : Comment on the "related note": beizulegender Wert is "fair value", adding "niedriger" makes it "the lower fair value". But the proposed answer is absolutely correct.
31 mins
Not so sure - see Robin's comments on https://www.proz.com/kudoz/german-to-english/accounting/2070...
agree Susan Starling : Yes, and I'd agree with Ted's comment on the "related note" too. (Robin's comment from 2007 is "pre-BilMoG" btw.)
2 hrs
agree Andrew Bramhall : Agree with your answer and your comments below Michael's;
5 hrs
disagree RobinB : Sorry, Steffen, I have to disagree with you. Which happens very rarely, as you know. BTW, that HGB English translation sucks, mightily. Oh, and fair value in German is "beizulegender Zeitwert". The "Zeit" is missing here, so no fair value is involved.
7 hrs
I did realise that "beizulegender Wert" is not the same as "beizulegender Zeitwert", which is why I ruled out "fair value" in my added note. Your translation is spot on, though.
agree TechLawDC : Lower of nominal value or (fair) market value. Nominal value would normally be par value; here one must assume it is contemplated that a par value exists. Consensus market value might not exist, ergo as an English lang. accountant I say (fair) mkt val.
12 hrs
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