Answers / Financial Due Diligence
What are the key differences between FDD in the US and Germany/DACH?
An advanced Financial Due Diligence question — expect it in final rounds and case-heavy interviews (IB, PE, Big-4 Transaction Services).
THE SHORT ANSWER
Germany: greater emphasis on HGB vs. IFRS differences, Handelsregister/Bundesanzeiger as data sources, Kurzarbeit and government subsidy programs, stricter employee termination laws affecting restructuring costs, GewSt/KSt tax structure complexity, and different working capital norms (German Mittelstand often has longer payment terms). Also: IDW standards may apply if FDD feeds into a formal valuation.
WHAT INTERVIEWERS LISTEN FOR
- ✓HGB vs. IFRS accounting differences
- ✓Public register data sources (Handelsregister, Bundesanzeiger)
- ✓Kurzarbeit and government subsidies impact
- ✓Strict employee termination laws
- ✓Trade tax (GewSt) complexity and working capital norms
COMMON MISTAKES
- ✗Overlooking HGB adjustments when comparing to US GAAP
- ✗Ignoring local tax implications (GewSt, KSt)
- ✗Assuming same working capital cycles as US
Reading isn't the same as answering under pressure.
Interviewers don't hand you the model answer — you deliver yours on a clock. Practice this and 1,000+ questions with AI feedback on every answer.
RELATED QUESTIONS
- What Excel skills are most important for FDD?
- Walk me through how you'd start analyzing a company you know nothing about.
- How do you handle a carve-out in FDD?
- What is a Vendor Due Diligence (VDD) report and how is it different?
- How do you assess the quality of a company's financial reporting?
- What is an earn-out and how does FDD support it?