The Federal Fiscal Court has ruled that a claim of the landlord arising from an existing restoration obligation for the tenant is not to be capitalized as long as the occurrence of the claim is still uncertain.
Practical example:
The plaintiff had leased land to a GmbH on which infrastructure owned by the tenant was located. Under certain circumstances, the framework lease agreement required the GmbH to dismantle this infrastructure at the end of the contract or to reimburse the plaintiff a certain amount for the dismantling costs. However, as the owner of the infrastructure, the GmbH was free to dismantle it at its own expense at a time of its choosing before the end of the contract. The GmbH had formed provisions for the dismantling obligations in its balance sheets. The tax office was of the opinion that the plaintiff had to capitalize receivables in the amount of the amounts carried as liabilities by the GmbH, thereby increasing profits.
The tax court upheld the claim. The plaintiff's claims were not to be capitalized in the years in dispute because the accrual of the claims was by no means certain on the balance sheet dates. There was no quasi-certain, sufficiently concrete and therefore realized claim. The tax office lodged an appeal.
The BFH confirmed the judgment of the tax court. As the contractual dismantling provisions are only applicable if infrastructure is available at the time the contract is terminated, it was by no means certain that the receivables would arise on the balance sheet date. Capitalization was therefore ruled out.