Evaluation according to IDW S11

Standard for the evaluation of insolvency

Download IDW S6 guidelines

Why? Because it must be established at the beginning of a restructuring report in accordance with IDW S6 whether the company in crisis is subject to (imminent) illiquidity and/or over-indebtedness. The most important foundations for this are a) financial status and b) financial planning derived from a meaningful business concept.


The establishment of a “financial status” and – in the case of a negative financial status – the drawing up of a financial plan (over at least four weeks) to assess solvency.


The calculation of the liquidity requirement for (at least) the current and coming business year that must be covered with overwhelming probability (= positive going concern forecast) and – in the case of a negative going concern forecast – the preparation of an asset status to allow evaluation of over-indebtedness.

What is the main issue here?


Insolvency under §17 InsO must be excluded. This is the case when due payment obligations cannot (or can no longer) be fulfilled. 


There must be no over-indebtedness pursuant to §19 InsO [German insolvency legislation]. This is the case if the company has a negative going concern prognosis and the net assets are negative under the assumption of liquidation values.

Furthermore, the stipulations of the Federal Supreme Court (Bundesgerichtshof) in earlier case law must also be observed. In short, the prognosis for the feasibility of the restructuring must be made by an unbiased and qualified third party.

Important note on the difference between “insolvency” and “payment stagnation”.

Caution! What follows is legalese:
“A mere payment stagnation is to be accepted in principle if the period of time a creditworthy person needs to borrow the required funds (financial gap) is not exceeded. For this it seems that three weeks are necessary, but also sufficient.”

If the insolvency grounds can be ruled out after the establishment of the company’s financial status, the drawing up of the required financial plan and the determination of a positive ongoing business prognosis, the task of actually restructuring begins with the drawing up of the restructuring concept .

Indications of insolvency (suspension of payments)

Our turnaround experts will be delighted to explain to you in more detail how well we understand companies in crisis, the associated problems, and how we can usually solve them. Our success rate of over 90% and recommendation rate of 98% speak for themselves.


[Translate to English:]

Georgiy Michailov Managing Partner Diploma in Economics, B.M. (TSUoE)

Read More
[Translate to English:]

Dietmar Buchfink Managing Partner Technical Diploma in Business Studies

Read More