Concerns — do people want to?
Fear dominates a restructuring: of job loss, of losing face, of the next cut. Ignore the concerns and you earn silent resistance. Measures get ticked off formally but never truly delivered.
Restructuring & Special Situations
IDW S6: What a German Restructuring Opinion Requires — and Where It Is Won in Execution
When a German company hits a serious crisis and needs fresh money, banks and creditors almost always ask for the same thing: a restructuring opinion under IDW S6. But the opinion is a snapshot. Whether the turnaround succeeds is decided afterwards, in execution.
The expert opinion is the admission ticket to deferrals, new credit lines, and creditors waiving due claims. Without it, very little moves in a serious crisis.
But this opinion is a snapshot. It confirms that a turnaround can succeed. Whether it does is decided afterwards: in the execution of the measures, over many months, under the watch of the creditors. That is exactly where most concepts fail. This guide explains what IDW S6 demands, which crisis stages it distinguishes, and when a company is considered restructurable. Above all, it shows where execution breaks down, and the three levers that hold it together. If you are coming from outside Germany, treat this as the operating manual behind the standard, not just its definition.
01
What IDW S6 Is, and Why Creditors Demand It
IDW S6 is the standard issued by the Institute of Public Auditors in Germany (Institut der Wirtschaftsprüfer, IDW) for preparing restructuring concepts. The version in force today dates from 2018 and was updated in 2023.[1] It defines the requirements a sound restructuring concept must meet to hold up in front of creditors and in court.
The purpose is twofold. First, the opinion creates an objective, defensible basis for the question of whether a company is viable. Second, it protects everyone legally: management, advisors and creditors alike. Anyone who extends fresh money to a distressed company without a sound concept risks clawback if insolvency follows later. A positive IDW S6 opinion removes the ground from under that risk.
That is why it sits at the start of almost every out-of-court restructuring. Typical triggers are a canceled loan, a refinancing, a new shareholder, or simply the lead bank's condition before it commits further. The opinion may be prepared by anyone with the requisite expertise: usually auditors, specialized tax advisors and lawyers, or experienced restructuring consultants. What matters is demonstrable experience in crisis diagnosis, financial planning and strategic repositioning, not the title on the door.
02
The Six Crisis Stages: Where Does the Company Actually Stand?
IDW S6 treats a crisis not as a state but as a trajectory. It distinguishes six stages that typically follow one another but can overlap. The later the stage, the smaller the room to maneuver, and the higher the tempo execution demands.
The six crisis stages
- 1Stakeholder crisis
Owners, board and management pull in different directions; decisions stall. Still invisible in the numbers, already in motion.
- 2Strategy crisis
The business model or market position no longer holds. Direction is missing; the damage is strategic.
- 3Product & sales crisis
The strategic weakness surfaces: revenues decline, market share erodes.
- 4Earnings crisis
Profitability turns negative. Losses consume equity; reserves melt away.
- 5Liquidity crisis
Solvency is acutely threatened. Now days count, not quarters.
- 6Insolvency maturity
Illiquidity or over-indebtedness exists or is imminent. Statutory insolvency duties apply.
Six crisis stages, ordered from earliest to latest — the room to steer shrinks as the tempo rises: Stage 1 — Stakeholder crisis. Room to steer: wide. Tempo: Invisible in the numbers. Owners, board and management pull in different directions; decisions stall. Still invisible in the numbers, already in motion. Stage 2 — Strategy crisis. Room to steer: wide. Tempo: Strategic, not yet financial. The business model or market position no longer holds. Direction is missing; the damage is strategic. Stage 3 — Product & sales crisis. Room to steer: moderate. Tempo: Revenue & share erode. The strategic weakness surfaces: revenues decline, market share erodes. Stage 4 — Earnings crisis. Room to steer: moderate. Tempo: Losses eat equity. Profitability turns negative. Losses consume equity; reserves melt away. Stage 5 — Liquidity crisis. Room to steer: narrow. Tempo: Days, not quarters. Solvency is acutely threatened. Now days count, not quarters. Stage 6 — Insolvency maturity. Room to steer: almost none. Tempo: Statutory duties apply. Illiquidity or over-indebtedness exists or is imminent. Statutory insolvency duties apply.
The classification is not a formality. Since the 2018 revision, the scope of a restructuring concept is no longer set by formal criteria but by the specific crisis stage.[1] Diagnose early and you keep more levers. Miss the shift from earnings crisis to liquidity crisis and you lose precisely the instruments a turnaround still needs. The legal thresholds behind the final stage are covered in our guide to corporate insolvency and the three windows before it is too late.
03
When a Company Qualifies as Restructurable
IDW S6 tests restructurability in two stages. Both must be met.
| Stage 1 — Going concern capability | Stage 2 — Competitiveness and earning power | |
|---|---|---|
| What it secures | Survival | The future |
| The test | The company must be fully financed across the entire restructuring period, supported by a positive going-concern forecast under insolvency law. | By the end of the planning horizon, the company must be sustainably viable: a defensible market position, an industry-typical return, an adequate equity base, and the ability to service debt and refinance. |
| In plain terms | Is there enough liquidity to reach the turnaround at all? | Is the business model repaired, not just the cash position? |
The distinction matters. Stage 1 secures survival, Stage 2 secures the future. A concept that only safeguards liquidity but never repairs the business model is not restructurable under IDW S6.[2] And it is this second stage that decides the outcome in execution, because competitiveness and earning power are not produced in the opinion. They are produced in hundreds of realized measures.
04
From Opinion to Concept: Base Case, Measures Plan, and the Mandatory Proof
"IDW S6 opinion" and "IDW S6 concept" are often used interchangeably. A cleaner split helps: the opinion judges whether a turnaround can succeed. The concept describes how. It is the operating map, and it is against this map that the standard measures execution.
This is where the real work begins, and where most concepts fail. How to separate genuine impact from market movement and trace it through to the P&L is shown in our guide to measuring transformation impact.
05
Why IDW S6 Concepts Fail in Execution — and the Three Levers Against It
A signed opinion is not a success. It is a permission. Success is produced in the twelve to twenty-four months that follow, when the company has to deliver every single measure under heightened pressure, with reduced resources, and under the watch of its creditors.
The typical fault lines have been the same for years: targets set too high, missing data, resistance from leadership and workforce, coordination problems across silos, unsuitable metrics. The striking part: almost none of these are technical. They are problems of mobilization and control.
We map them to the three levers of the 3C method: Concerns, Competencies, Coordination.
The 3C method
Competencies — can they, and are they allowed to?
Restructuring measures often demand skills the day-to-day never needed: supplier negotiation, working-capital control, defensible impact measurement. They also demand a clear mandate to act, the decision rights and authorization to actually pull the lever. Without the capability or the mandate, the best measure stays theory.
Coordination — does it mesh?
In a crisis, dozens of measures run in parallel across functions and sites. Without clean synchronization they block each other, or their effect dissipates because no one consolidates it.
Most tools used in a restructuring address only the third, coordination, and even that only as a task list. The first two, the wanting and the ability, fall through the cracks. Yet that is where the leverage is. A McKinsey analysis of 60 listed companies found that programs with the highest active workforce involvement (21 to 30 percent) delivered an excess return (excess TRS) of +67 percentage points over 24 months versus the industry benchmark, while programs with minimal involvement landed 18 percentage points below it.[3] Involvement is not a soft factor. It is the hardest lever on the result.
06
Degree-of-Implementation: The Stage Gate IDW S6 Already Requires
The second differentiator lies in proof of effect. IDW S6 requires a stage-gate plan and a defensible effect per measure. That can be captured in a spreadsheet, but rarely kept consistent across hundreds of measures over many months.
- 1 Idea
- 2 Robust concept
- 3 Live implementation
- 4 Realized effect in the P&L
A measure only advances a stage once its effect is evidenced, not when a status is colored green.
A degree-of-implementation workflow turns exactly this requirement into the operating system of execution. Every measure passes defined maturity stages: from idea to a robust concept, through live implementation, to a realized effect confirmed in the P&L. A measure only advances a stage once its effect is evidenced, not when a status is colored green. That replaces the "green status" which so often misleads creditors with an auditable degree of maturity. How such a maturity model is built systematically is shown in our PMO Maturity Model guide.
€65 m
bottom-line impact in a sanitized restructuring program with real KPIs
Live data replaced the weekly slide production and saved the PMO roughly 85 percent of its reporting time.
In a restructuring program with around €65 million of bottom-line impact (sanitized case study with real KPIs), measures linked directly to P&L, balance-sheet and cash effects, the degree-of-implementation workflow enforced maturity over optimism, and the 3C mechanisms activated the people instead of merely administering their tasks.[4]
07
The Role of the PMO — and Why Spreadsheets Cost Creditor Trust
In execution, a restructuring PMO takes the wheel: tracking measures, measuring impact, reporting to creditors and the supervisory board. It sounds administrative. In a crisis it is the switchboard where trust is won or lost.
The problem with common practice: reporting consumes the capacity that control needs. Status decks get consolidated over the weekend from dozens of spreadsheets, are already stale by the creditor meeting, and small inconsistencies, a transposed figure here, a missed update there, cost precisely what a restructuring needs most: credibility with the people providing the money.
This is where a program platform earns its place. Not as yet another tool, but as a single source of truth where measures, ownership, maturity and financial impact live in one place and reports roll up automatically across every level. ChangeMaker® is built for exactly this: measures link directly to P&L, balance-sheet and cash effects, the degree-of-implementation workflow enforces maturity over optimism, and the 3C mechanisms activate the people instead of merely administering their tasks.
The honest boundary
| A pure measure-tracker | Method, proof of effect and mobilization | |
|---|---|---|
| When it is enough | Only when little is at stake: no creditors watching, no IDW S6 proof of effect to defend, a handful of measures you could just as well keep in a spreadsheet. | The moment a restructuring runs under creditor pressure, with every measure evidenced, every team activated and the impact defensible all the way into the P&L. |
| What it offers | A task list. | Measures, ownership, maturity and financial impact in one place, rolling up automatically. |
| Under creditor pressure | A tracker falls short. | What counts then is the combination of method, proof of effect and mobilization. |
That is the honest boundary. If you are reading this because an IDW S6 process is underway, you are already in the second case.
08
Conclusion: The Opinion Is the Start, Not the Result
IDW S6 is a precise instrument for judging whether a company can be saved. It answers whether a turnaround can succeed, and it protects everyone involved legally. What it cannot do is deliver the turnaround itself.
That is decided afterwards, in execution. It hinges on whether people want to, can, and act in coordination, and on whether the effect of every measure is evidenced well enough for creditors to believe it. Whoever makes execution steerable from day one — instead of leaving it to chance and a spreadsheet — achieves exactly what IDW S6 demands: sustainable earning power. Make change. Not plans.
See how ChangeMaker® turns an IDW S6 concept into steerable, bankable execution.
Make change. Not plans.
Frequently asked questions
What is IDW S6?
IDW S6 is the standard of the Institute of Public Auditors in Germany for preparing restructuring concepts. It sets out the requirements a restructuring concept must meet to hold up before creditors and courts. The relevant version is the 2018 edition in its 2023-updated form.
Who may prepare an IDW S6 opinion?
Usually auditors, specialized tax advisors and lawyers, and experienced restructuring consultants. What is decisive is demonstrable expertise in crisis diagnosis, financial planning and strategic repositioning, not the professional title alone.
What is the difference between an IDW S6 opinion and an IDW S6 concept?
The opinion assesses whether a turnaround can succeed and delivers the objective verdict on restructurability. The concept describes how: concrete measures, timelines and responsibilities. In practice the two are closely linked and often used synonymously.
Which crisis stages does IDW S6 recognize?
Six: stakeholder crisis, strategy crisis, product and sales crisis, earnings crisis, liquidity crisis, and insolvency maturity. They typically follow one another but can overlap. The stage determines the required scope of the concept.
When does a company qualify as restructurable?
When two stages are met. First, going concern capability: full financing across the restructuring period with a positive continuation forecast. Second, sustainable competitiveness and earning power at the end of the planning horizon, with an industry-typical return and adequate equity.
Is a spreadsheet enough to execute an IDW S6 concept?
Technically yes, in practice rarely. The standard requires a stage-gate plan and an isolated, evidenced proof of effect per measure, across hundreds of measures and many months. That is exactly where spreadsheet-based processes turn error-prone and slow, which costs trust under creditor pressure. An integrated program platform keeps measures, maturity and financial impact consistent and current.
Sources
- Institut der Wirtschaftsprüfer (IDW), „IDW Standard: Requirements for the Preparation of Restructuring Concepts (IDW S 6)“, revised 2018, updated 2023. idw.de
- Two-stage test of restructurability (going concern capability; sustainable competitiveness and earning power) under IDW S 6. Summarized, among others, by Ebner Stolz, „IDW S 6: Anforderungen an Sanierungskonzepte“. ebnerstolz.de
- McKinsey & Company, „Seven percent solution? How many employees should be involved in your transformation?“ (2021). Excess TRS over 24 months, n=60 listed companies; highest excess return at 21–30% actively involved workforce, lowest at minimal involvement. Read as correlation, not guaranteed causation. mckinsey.com
- Client program (restructuring), ChangeMaker®; client identity sanitized, figures are real client data. First-party data from Principia Mentis, not an independent study.
See how ChangeMaker® turns an IDW S6 concept into steerable, bankable execution.
Or call directly: +49 89 904 114 600.