Opening balance

What is an opening balance?

The opening balance sheet is a balance sheet to be drawn up when the company is founded or at the beginning of a new financial year. In Section 242, Paragraph 1 of the German Commercial Code (HGB) it is stipulated that every merchant must prepare an opening balance sheet at the start of his trade. Your creation is the first step in the booking process in the company.

Creation of the opening balance

After the opening balance sheet has been created, individual balance sheet items on their assets or liabilities side are transferred to the opening balance sheet account to be set up as opening balances.

This is done so that the balance sheet items can be posted to the general ledger accounts as opening balances.

Opening balance account

In the opening balance account, the assets of the opening balance are in the credit and the liabilities in the debit. It can be seen from the figures that the opening balance sheet shows the stocks in mirror image. This means that the principle of double-entry bookkeeping is maintained, ie the asset items of the opening balance sheet appear in the credit of the opening balance sheet account.