Before we look at the consequences of these economic changes for the evaluation of balance sheets, we would like to present two government aid schemes as examples of how such things should be treated in terms of bookkeeping:
Thanks to the short-time working allowance, from March 2020 onward German companies had the possibility to reduce their personnel costs without the necessity for mass redundancies. From an accounting perspective, the employer acts as a trustee who simply transfers the short-time allowance to his employees. The result is a reduction of the personnel costs without any complimentary payments appearing in the income statement.
It should be noted, however, that the employer's contributions to social insurances are handled differently. These continue to appear as costs in the income statement but are later refunded by the Federal Employment Office (Bundesagentur für Arbeit) and booked as other operating income.
The so-called "immediate corona support payments" are treated in a similar way. These were available from 13th June to support companies and self-employed people who suffered enormous financial pressure and lack of liquidity due to the pandemic. This immediate aid appears on the balance sheet in the same way as the employer's contributions to social insurances: as other operating income.
It is therefore important to note that the support payments as compensation for the decline in turnover due to corona are not compiled as turnover but as other operating income. Furthermore, it should be observed that due to the lengthy approval and evaluation procedures, the payouts of the corona support may have taken place in instalments, which means that liabilities may have been created until the date of formal approval. This date is therefore decisive in determining the business year in which the corona support actually occurred.