The Intercompany Balance Confirmation Letter is a critical document used in German corporate practice to verify and document financial positions between related entities within a corporate group. It is typically prepared at regular intervals (often quarterly) and always at year-end to comply with German accounting and auditing requirements under the Handelsgesetzbuch (HGB) and German GAAP. The document serves multiple purposes: it confirms the accuracy of intercompany accounts, supports audit procedures, helps identify and resolve discrepancies, and provides documentary evidence for tax authorities. It's particularly important in German jurisdiction due to strict documentation requirements and the emphasis on accurate financial reporting. The letter includes specific balance amounts, transaction details, and requires formal confirmation from authorized representatives of both entities.

1. Letterhead and Date: Company letterhead of the confirming entity and current date

2. Recipient Details: Full legal name and address of the receiving entity

3. Subject Line: Clear indication that this is an Intercompany Balance Confirmation as of [specific date]

4. Balance Statement: Clear statement of the intercompany balance amount, currency, and as-of date

5. Transaction Summary: Brief summary of major transactions that led to this balance

6. Confirmation Request: Request for the recipient to confirm the stated balance

7. Response Instructions: Clear instructions on how and when to respond to the confirmation request

8. Authorization: Signature block for authorized signatories from both companies