What are the main challenges in an HGB-to-IFRS transition?

It's a 12–18 month project touching policy, data, systems, and people. The big technical conversion areas: IFRS 16 (operating leases on the balance sheet — large gross-up); business combinations/goodwill (full PPA and intangible recognition for existing subs, no goodwill amortization vs HGB's amortization); IFRS 15 revenue (different timing/recognition than HGB's realization principle); IAS 19 pensions (different discount rate and actuarial treatment vs HGB's BilMoG approach); IFRS 9 financial instruments (classification, ECL impairment, hedge accounting); deferred tax (full recognition under IAS 12 vs HGB's more limited approach); and provisions (IAS 37 vs HGB measurement). HGB's prudence/creditor-protection orientation generally yields lower equity and smoother profit, whereas IFRS is decision-useful and more volatile. Process challenges: choosing IFRS 1 first-time-adoption exemptions, restating comparatives, building dual reporting in the transition year, system/chart-of-accounts changes, and training. The mistake is treating it as a pure accounting exercise rather than a data/systems/people change program.