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Is Bertsch Energy’s calculation wrong? – V + –

The annual financial statements for 2019 and 2020 of the multi-million-euro power plant manufacturer Bertsch Energy GmbH & Co KG, whose owners have been under lock and key for far too long, have now found their way into the trade register.

Bankruptcy administrator Wilhelm Klagian submitted the financial statements to the Company Registration Court in Feldkirch as required, where they were last published.

This now also shows in black and white and in detail the dramatic deterioration in Bertsch Energy’s economic situation between 2019 and 2020, excerpts from which have already been reported.

However, this overall deterioration is not primarily related to the changing economic environment in 2020 but, as is assumed, primarily to the way accounting is done and the way orders are booked before the end of 2020 and therefore also to change. of references. Because in the years leading up to and including 2019, Confirm Wirtschaftsprüfung GmbH from Leonding (Upper Austria) was commissioned to audit the annual financial statements of Bertsch Energy. Meanwhile, the Vorarlberg subsidiary of HLB Intercontrol Austria GmbH in Feldkirch examined the financial statements for the fiscal year 2020.

The auditors at HLB Vorarlberg have turned some accounting and valuation methods on their head in important areas compared to their predecessors. They refer to the applicable legal status according to the Austrian Commercial Code (UGB).

The precautionary principle was not taken into account

Thus, the annual financial statements for the year 2020 prepared in this way read: “By 2019, the planned results from the project work had already been achieved during the project phase. However, UGB only states that profits made on the balance should be reported on the date paper.In project work it usually means that sales revenue can only be realized after the contract has been fully fulfilled and accepted by the customer (risk transfer).Projects must be recognized as services not yet charged to inventory at production costs.Furthermore,the UGB should take the principle of precaution into account that identifiable risks and imminent losses must be taken into account.”

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The actual extent is not recognizable

And further: “In the past, project progress was actually counted before it was completed, similar to IFRS using the POC (Percentage of Completion) method. This procedure means that instead of inventories of manufacturing costs, receivables including Partial earnings and corresponding expenses have also been insufficiently deferred./…/ Hence the balance sheet approach to project work will be recorded from 2020 in accordance with UGB’s prudence and prudence.” Because pre-accounting for partial profits also means that “project failures are reported too late.” The exact extent of the negative anomalies was not clear by the end of 2019, according to the 2020 annual financial statements.

Negative equity in excess of €42 million

And so the new approach brought with it the adjustment of the balance sheet and income statement numbers for 2019 and 2020. The result: the annual deficit from 2019 to 2020 worsened from minus 4.6 million euros to minus 60 million euros. The loss attributed to shareholders exploded from more than 99,000 euros to more than 60 million euros. On the balance sheet, equity has shifted from plus 4.7 million euros to minus 42.6 million euros.

Accounting fraud?

According to accounting experts, balance sheet which may not have been properly prepared as per UGB should not be compiled with intentional falsification of the balance sheet. Especially with large projects that have been in operation for years, there are always differing opinions among experts as to how these should be presented on the balance sheet. In the case of Bertsch Energy, there is also the question of whether prior knowledge of the company’s actual financial condition will make a significant difference to its further development. The insolvency manager now has to deal with this very complex question. After all, this also concerns the potential responsibilities of the former auditor and management of Bertsch Energy. If the liabilities are actually materialized, this will have a positive effect on the creditors’ share.

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The insolvency administrator examines potential liabilities

Insolvency Director Wilhelm Klagian explained to wpa that after the successful sale of the operational business of the insolvent Bertsch Energy GmbH & Co KG, these questions are now beginning to be addressed. “During 2023, we will deal with the massive deterioration in balance sheet numbers and also examine the issue of whether there is a liability on those responsible.” (commercial press agency)