fb

We’ve got some good news for you. We’ve just found 55 billion euros…

We’ve got some good news for you. We’ve just found 55 billion euros…

Sometimes things go missing. You search high and low and if you are lucky enough to find them again then you can be pretty happy.

Germany though has just found something that it didn’t even know was missing.

It’s not as though it’s simply some keys that have dropped down the back of the sofa. No, Germany has just found €55 billion.

This is a pretty significant amount and the “find” came about due to spotting an accounting error.

In October last year, FMS Wertmanagement was created when toxic loans and securities with a face value of nearly €175 billion were transferred to it from HRE bank which was nationalised in 2009.

In other words, a so called “bad bank” was created out of the insolvent parts of HRE bank whereby the bad parts (the toxic debts) of the HRE bank were moved to a separate bank (FMS Wertmanagement).

Moving the toxic debt to the “bad bank” meant that what stayed in the nationalised HRE bank was non toxic and the nationalised HRE bank became solvent. This would in thoery help ensure that HRE bank would make a full recovery.

The German Finance Ministry today announced that there had been a double booking of debt and that staff had inadvertently subtracted funds when they should have added them.

The end result is that the reversal of this accounting error means that German debt, as a percentage of GDP reduces from 83.7% to 81.1% – i.e. debt has fallen by 2.6 percentage points.

So, in summary some good news for the German economy.

I should also mention that if the person that made the initial accounting error is by any chance reading this then we do run a wide variety of training programmes including our introduction to finance range of courses…

Share this entry

Recent articles

View All Articles
Big 4 under the spotlight…
May 22, 2024
Title
Big 4 under the spotlight…
Excerpt

Recent findings have shown that Britain’s audit firms did not raise alarms for three-quarters of the major companies […]

Better than the professionals?
May 13, 2024
Title
Better than the professionals?
Excerpt

The landscape of investing is evolving, with the rise of retail, or “do-it-yourself” (DIY) investors who are achieving […]

Don’t get angry over anger management
May 07, 2024
Title
Don’t get angry over anger management
Excerpt

Have you ever been angry at work? If you have then you are not alone. The latest Global […]

Cows or dogs in your portfolio?
May 01, 2024
Title
Cows or dogs in your portfolio?
Excerpt

As well as being included in ACCA, CIMA and CMA (USA) exam questions over the years, the Boston […]

KPMG unlocks previously locked up talent.
Apr 30, 2024
Title
KPMG unlocks previously locked up talent.
Excerpt

KPMG, one of the Big Four accounting firms, has recently announced its commitment to expanding its hiring of […]

Taxing times…
Apr 24, 2024
Title
Taxing times…
Excerpt

Understanding the various forms of taxation is essential for business students worldwide. Taxes serve not only as a […]

From Coins to Codes: A Budgeting Timeline
Apr 22, 2024
Title
From Coins to Codes: A Budgeting Timeline
Excerpt

The concept of budgeting, a cornerstone in both personal finance and corporate management, has a rich history that […]

Italian but not Italian…
Apr 17, 2024
Title
Italian but not Italian…
Excerpt

In the complex landscape of global business, the names of products and brands hold significant power. They convey […]