HGB §§300–307
Full Consolidation
Vollkonsolidierung
The HGB provisions governing full consolidation (Vollkonsolidierung) mechanics, including capital consolidation, intragroup elimination, and non-controlling interests.
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Conceptual Framework Linkage
A THIRD ANCHOR-LEVEL POSTER: this Titel supplies the actual techniques implementing the §297(3) single-enterprise fiction. §301's capital consolidation is HGB's own version of purchase-price-allocation accounting – and its treatment of a bargain purchase differs sharply from IFRS 3's immediate profit-or-loss recognition. Expect real depth below.
Where the single-enterprise fiction becomes mechanical reality
§297(3) declared the group must be presented AS IF it were one enterprise. §§300–307 are HOW that declaration actually gets executed: combining accounts line by line, eliminating the parent's investment against the subsidiary's equity, erasing intragroup receivables/payables and intragroup profits, and carving out the portion of the subsidiary genuinely belonging to outside shareholders.
HOW §§300–307 MAP TO GERMAN ACCOUNTING PRINCIPLES
Vollständigkeitsgebot, at its most literal – §300(1) requires FULL, 100% combination of every included subsidiary's accounts, regardless of the parent's actual ownership percentage Einheitstheorie (entity theory) – NCI is presented WITHIN group equity (§307), not as a liability, reflecting the view that non-controlling shareholders are still genuine equity participants in the SAME single enterprise
What §§300–307 require, at a glance
§Core requirement
300Full (100%) combination of every subsidiary, after uniform measurement
301Capital consolidation – offset investment against revalued subsidiary equity; goodwill or bargain purchase
302Repealed – no current content
303Eliminate intragroup receivables/payables entirely
304Eliminate intragroup profit still embedded in group assets
305Eliminate intragroup revenue/expense and dividend income
306Deferred tax on temporary differences created BY consolidation itself
307Carve out non-controlling interests within group equity and group net income
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Scope
Every subsidiary included per §§294–296
§§300–307 apply the actual consolidation mechanics to every subsidiary the previous poster's Konsolidierungskreis Titel determined must be included – with NO exceptions for partial ownership, since §300(1) consolidates fully regardless of stake size.
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§300(1) – 100% Consolidation, Regardless of Ownership Percentage
A 51% stake still consolidates 100% of the subsidiary's accounts
§300(1) requires the FULL combination of the parent's and each included subsidiary's individual accounts, line by line – REGARDLESS of the parent's actual ownership percentage. A subsidiary 51%-owned is consolidated at 100%, with the OTHER 49% then carved out and shown separately as non-controlling interests under §307 (Section 18) – NOT proportionately consolidated at 51% of each line item. This "full consolidation, then carve out NCI" structure is the DEFINING characteristic of Vollkonsolidierung as a technique, distinguishing it from the proportionate consolidation method still available for joint arrangements elsewhere in HGB.
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§300(2) – Uniform Measurement Before Combination
Restating to group-wide methods and format BEFORE adding anything together
§300(2) requires each entity's individual accounts to be ADJUSTED to conform to uniform group-wide measurement methods (per §308, a later Titel) and adapted to the prescribed group Bilanz/GuV format BEFORE combination – the SAME requirement illustrated with the LIFO example in the previous poster, now stated as a formal precondition to the combination step itself.
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§301 – Kapitalkonsolidierung: HGB's Own Purchase-Price-Allocation
Offsetting the parent's investment against the subsidiary's revalued equity, at acquisition date
§301(1)–(2) requires the parent's carrying amount for its investment in the subsidiary (Beteiligungsbuchwert) to be OFFSET against its proportionate share of the subsidiary's EQUITY – generally measured using the ACQUISITION-DATE fair values of the subsidiary's identifiable assets and liabilities (the "Neubewertungsmethode," or revaluation method) – broadly analogous in overall shape to IFRS 3's acquisition method, though with HGB's own specific mechanics and terminology.
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Worked Example – a Full Capital Consolidation, Computing Goodwill
A textbook positive-difference acquisition
Example 1: Acquiring 100% of a subsidiary above its revalued net asset value
A parent acquires 100% of a subsidiary for €8,500,000. At the acquisition date, the subsidiary's identifiable assets and liabilities, revalued to fair value per §301's Neubewertungsmethode, amount to €6,800,000 of net assets.
Goodwill = €8,500,000 − €6,800,000 = €1,700,000, recognised on the Konzernbilanz and – CRITICALLY, per the SAME §246(1) sentence 4 rule established in the earlier §§246–251 poster – subject to MANDATORY systematic amortisation over its estimated useful life, NOT an impairment-only regime. Goodwill arising from capital consolidation is treated IDENTICALLY to goodwill arising from an individual-entity asset acquisition.
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THE BARGAIN PURCHASE DIVERGENCE – Negative Difference vs IFRS 3
A separate equity item, NOT immediate profit-or-loss recognition
§301(3) addresses the OPPOSITE scenario – where the parent's cost is LESS than its share of the subsidiary's revalued net assets (a "negative difference," or negativer Unterschiedsbetrag – the classic bargain purchase). Under HGB, this negative difference is shown as a SEPARATE item WITHIN group equity, rather than flowing through the Konzern-GuV immediately. This is a GENUINE, notable divergence from IFRS 3, which requires a bargain purchase gain to be recognised IMMEDIATELY IN PROFIT OR LOSS at the acquisition date, after re-verifying the measurement is correct.
HGB's more cautious equity-item treatment reflects its characteristic Vorsichtsprinzip instinct: an apparent "bargain" is treated with initial suspicion rather than immediately recognised as a windfall profit, consistent with the same asymmetric prudence this entire poster series has repeatedly documented.
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Worked Example – a Negative Difference (Bargain Purchase)
Held in equity, not recognised as an immediate windfall gain
Example 2: Acquiring a distressed-sale subsidiary below its revalued net asset value
A parent acquires 100% of a financially distressed subsidiary for just €2,000,000, in a forced/distressed sale. The subsidiary's identifiable assets and liabilities, revalued to fair value, amount to €2,600,000 of net assets.
The €600,000 negative difference (€2,600,000 − €2,000,000) is recognised as a SEPARATE item WITHIN group equity under §301(3) – CONTRASTING sharply with IFRS 3, which would require this SAME €600,000 to be recognised IMMEDIATELY as a bargain purchase GAIN in the Konzern-GuV (profit or loss). A group reporting under BOTH frameworks would show a materially different Konzern-GuV bottom line in the acquisition year purely because of this single divergence.
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§302 – Repealed
No current content
§302 is currently marked "(weggefallen)" – repealed, with no substantive content remaining.
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§303 – Schuldenkonsolidierung (Debt Consolidation)
A receivable one group company owes another simply cannot exist, from the group's perspective
§303 requires intragroup receivables and payables – and other intragroup balance sheet relationships, such as a provision one group company has recognised specifically in relation to another – to be ELIMINATED entirely from the Konzernbilanz, giving effect to the §297(3) single-enterprise fiction for BALANCE SHEET items specifically. Any difference arising from the elimination (e.g., from differing measurement bases or FX translation between the two entities' own records of the same intragroup balance) must be recognised as an expense or income item in the Konzern-GuV.
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Worked Example – Eliminating an Intragroup Loan
Both sides of the same internal loan simply vanish together
Example 3: A parent's loan to its own subsidiary
A parent lends €3,000,000 to its subsidiary. In the parent's own individual accounts, this appears as a €3,000,000 receivable; in the subsidiary's own individual accounts, a €3,000,000 payable.
In the Konzernbilanz, BOTH the €3,000,000 receivable and the €3,000,000 payable are ELIMINATED entirely under §303 – from the group's own perspective, as a single enterprise, this is simply money moved between its own left and right pockets, and no genuine external debt exists at all.
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§304 – Zwischenergebnisse: Eliminating Intragroup Profit Still Sitting in Assets
Stripping out the internal markup, unless genuinely immaterial
§304 requires elimination of intragroup profits or losses (Zwischenergebnisse) still contained WITHIN assets carried on the Konzernbilanz – typically inventory purchased from another group company at a markup, not yet sold to a genuinely EXTERNAL party – UNLESS the amount is of subordinate importance for giving a true and fair view of the group's position. The elimination restates the asset to its ORIGINAL group-wide cost basis, consistent with §300(2)'s uniform-measurement requirement.
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Worked Example – Eliminating an Inventory Markup
The mechanic first illustrated conceptually in the previous poster, now with real numbers
Example 4: Unsold inventory still carrying an internal markup
A parent manufactures a component at a cost of €400,000, and sells it to its subsidiary for €500,000 (a €100,000 intragroup markup). By year-end, the subsidiary has NOT yet resold the component externally – it remains in the subsidiary's own closing inventory at its €500,000 purchase price.
The Konzernbilanz eliminates the €100,000 intragroup profit still embedded in the inventory under §304, restating its carrying amount to the group's ORIGINAL €400,000 manufacturing cost – since from the group's own single-enterprise perspective, this component has not yet been sold to anyone OUTSIDE the group, and no profit has genuinely been earned on it yet.
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§305 – Aufwands- und Ertragskonsolidierung (Income/Expense Consolidation)
The GuV-side counterpart to debt consolidation
§305 requires intragroup REVENUE and the corresponding intragroup EXPENSE (e.g., the parent's intragroup sale revenue against the subsidiary's matching purchase/cost-of-goods expense) to be ELIMINATED from the Konzern-GuV – the income-statement-side parallel to §303's balance-sheet-side debt consolidation. This ALSO covers elimination of intragroup DIVIDEND income: a subsidiary's dividend paid to its parent must be eliminated from the parent's own investment income, since from the group's perspective this is merely an internal transfer of the group's own already-earned profit, not genuinely new external income.
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Worked Example – Eliminating Intragroup Revenue, Cost, and Dividend Income
Two intragroup flows, both eliminated for the same underlying reason
Example 5: Combining the earlier component sale with a subsidiary dividend
Continuing Example 4: the parent recorded €500,000 of intragroup revenue and the subsidiary recorded a corresponding €500,000 purchase cost. Separately, the subsidiary pays a €200,000 dividend to the parent during the year, which the parent recorded as €200,000 of investment income in its own individual GuV.
In the Konzern-GuV, the €500,000 intragroup revenue is eliminated against the SAME €500,000 intragroup cost under §305 (leaving the §304 profit-elimination adjustment from Example 4 to separately handle the embedded markup). The €200,000 dividend income is ALSO eliminated entirely – the group's own already-earned profit simply moved from one pocket (the subsidiary) to another (the parent), generating no genuinely NEW income for the group as a whole.
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§306 – Deferred Taxes Arising From Consolidation Itself
An additional layer, on top of each entity's own ordinary §274 analysis
§306 requires deferred tax recognition for temporary differences arising SPECIFICALLY from the consolidation procedures THEMSELVES – most notably, the §304 elimination of intragroup profit creates a difference between the GROUP's own consolidated carrying amount and the TAX basis reflected in the individual entity's own local tax return (since tax authorities generally tax based on each individual entity's own, UNCONSOLIDATED figures, which still include the eliminated markup). This sits ON TOP OF the ordinary §274 deferred tax analysis each individual entity already performs in its own separate accounts – a genuinely distinct, additional layer specific to the consolidation process.
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Worked Example – a Consolidation-Specific Temporary Difference
The group's own books diverge from what tax authorities actually see
Example 6: Deferred tax on the eliminated inventory markup
Continuing Examples 4–5: the subsidiary's OWN local tax return still reflects the €500,000 purchase price for the inventory (since tax authorities tax the subsidiary on an unconsolidated, standalone basis) – but the Konzernbilanz now shows the SAME inventory at only €400,000, following the §304 elimination.
This €100,000 difference between the group's own consolidated carrying amount (€400,000) and the tax basis reflected in the subsidiary's local return (€500,000) is a genuine temporary difference arising PURELY from the consolidation process – requiring its OWN deferred tax recognition under §306, applying the SAME general mandatory-liability/elective-asset asymmetry established for ordinary §274 deferred taxes in the earlier Bilanz poster.
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§307 – Anteile Anderer Gesellschafter (Non-Controlling Interests)
Carving the outside shareholders' portion back out of 100% consolidation
§307(1) requires the portion of a subsidiary's equity – AND of its net income for the period – attributable to shareholders OTHER than the parent (non-controlling interests, NCI) to be shown SEPARATELY WITHIN group equity on the Konzernbilanz, and separately within the Konzern-GuV. This is the direct consequence of §300(1)'s "consolidate 100% regardless of stake" approach: having combined the ENTIRE subsidiary, §307 now carves back OUT the portion genuinely belonging to outside shareholders, rather than never having included it in the first place.
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Worked Example – Calculating and Presenting NCI
The straightforward, ordinary case
Example 7: A subsidiary 75%-owned by the parent
A subsidiary has €4,000,000 of equity and generates €600,000 of net income for the year. The parent owns 75% of the subsidiary; the remaining 25% is held by outside shareholders.
The ENTIRE €4,000,000 equity and €600,000 net income are FIRST fully consolidated into the group accounts, per §300(1). Then, under §307, NCI = 25% × €4,000,000 = €1,000,000 is shown SEPARATELY within group equity, and 25% × €600,000 = €150,000 of the group's reported net income is separately attributed to NCI rather than to the parent's own shareholders.
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Worked Example – Negative NCI From Accumulated Subsidiary Losses
Losses attributed to outside shareholders even into a deficit
Example 8: A struggling subsidiary with accumulated losses exceeding NCI's original stake
A subsidiary, 80%-owned by the parent with the remaining 20% held by outside shareholders, has accumulated such significant losses over several years that the 20% NCI stake's own SHARE of the subsidiary's now-negative equity would itself be a NEGATIVE figure.
Consistent with the broader modernisation of HGB's own approach in this area – and CONVERGING with how IFRS 10 treats the same scenario – NCI is generally shown as a NEGATIVE figure within group equity, reflecting outside shareholders' full 20% share of the accumulated losses, RATHER than the parent absorbing the entire loss itself. The exact conditions and any residual thresholds are worth double-checking against current specific text for a live filing, but the general direction – losses attributed to NCI even into deficit – reflects the accepted modern approach.
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Critical Judgments & Practical Difficulties
Where judgement matters most
SIGNIFICANT JUDGEMENTS
Determining acquisition-date fair values for the §301 Neubewertungsmethode, particularly for intangible assets not previously recognised in the subsidiary's own individual accounts Whether an intragroup profit under §304 is genuinely of "subordinate importance" and can be left unelimianted
PRACTICAL DIFFICULTIES
Tracking intragroup balances and transactions across a large, multi-entity group to ensure §303/§305 eliminations are genuinely complete Maintaining the consolidation-specific deferred tax analysis under §306 as intragroup profit positions change year to year
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Relationship to IFRS (IFRS 3, IFRS 10)
Comparison – HGB §§300–307 vs IFRS
FeatureHGBIFRS
Full (100%) consolidation approachYES (§300(1))YES (IFRS 10) – CONVERGED
Goodwill subsequent treatmentMANDATORY amortisation (§246(1) s.4, carried into §301)Impairment-only (IFRS 3/IAS 36)
Bargain purchase (negative difference)Separate GROUP EQUITY item (§301(3))Immediate recognition in PROFIT OR LOSS (IFRS 3)
NCI presentation, including negative NCIWithin equity, including negative positionsWithin equity, including negative positions – CONVERGED
Intragroup profit eliminationRequired, subject to a materiality carve-out (§304)Required, no explicit materiality carve-out named in the standard itself (though materiality applies generally)
This Titel shows the SAME pattern as the earlier goodwill/business-combination comparisons in this series: the overall STRUCTURE of consolidation (full consolidation, NCI within equity) is strongly convergent, while the SPECIFIC treatment of goodwill and bargain purchases remains sharply divergent – directly tracing back to §246(1) sentence 4's mandatory amortisation rule established at the very start of this poster library.
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Statement Mapping
Where every §§300–307 event lands
Event / obligationDocument(s) affectedNotes
Capital consolidation (§301)KonzernbilanzGoodwill or negative-difference equity item recognised
Debt/profit elimination (§§303–304)KonzernbilanzIntragroup balances and embedded profit removed
Income/expense elimination (§305)Konzern-GuVIntragroup revenue, cost, and dividend income removed
NCI carve-out (§307)Konzernbilanz Konzern-GuVBoth equity and net income split between parent and NCI
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Related Provisions – Cross-Reference Map
How §§300–307 connect across HGB Book 3
ProvisionNature of the connection
§297(3)The single-enterprise fiction every mechanic in this Titel exists to implement
§246(1) s.4The mandatory goodwill amortisation rule carried directly into §301's capital consolidation goodwill
§274The ordinary individual-entity deferred tax framework §306 extends specifically to consolidation-created temporary differences
§§308–309The NEXT Titel, supplying the measurement rules underlying the uniform group-wide figures this Titel's combination and elimination steps rely upon
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Quick-Reference Glossary
Vollkonsolidierung
Full consolidation – combining 100% of a subsidiary's accounts regardless of the parent's actual ownership percentage.
Kapitalkonsolidierung
Capital consolidation – offsetting the parent's investment against its share of the subsidiary's revalued equity.
Neubewertungsmethode
The revaluation method – measuring the subsidiary's identifiable assets/liabilities at acquisition-date fair value for capital consolidation purposes.
Negativer Unterschiedsbetrag
Negative difference – a bargain purchase, shown as a separate group equity item under HGB rather than an immediate P&L gain.
Schuldenkonsolidierung
Debt consolidation – eliminating intragroup receivables and payables entirely from the Konzernbilanz.
Zwischenergebnisse
Intragroup profits/losses still embedded within group assets, eliminated under §304 unless genuinely immaterial.
Key
Konzernbilanz Consolidated balance sheet
Konzern-GuV Consolidated income statement