(2) Reporting principles

(2) Reporting principles

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS and IAS) as issued by the International Accounting Standards Board (IASB) and announcements by the IFRS Interpretations Committee (IFRIC and SIC) in force on the reporting date and as adopted by the European Union, as well as the additionally applicable provisions of section 315e of the German Commercial Code (HGB). The fiscal year corresponds to the calendar year. These consolidated financial statements have been prepared in euros, the reporting currency. The figures presented in the consolidated financial statements have been rounded. This may lead to individual values not adding up to the totals presented.

The accounting and measurement policies used in the consolidated financial statements are presented in the following Notes and are marked there.

Standards, interpretations and amendments applicable for the first time in the year under review

The following regulations are binding as of fiscal 2020:

• Amendment to IAS 1 “Presentation of Financial Statements”
• Amendment to IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors”
• Amendment to IAS 39 “Financial Instruments: Recognition and Measurement”
• Amendment to IFRS 3 “Business Combinations”
• Amendment to IFRS 7 “Financial Instruments: Disclosures”
• Amendment to IFRS 9 “Financial Instruments”
• Amendment to IFRS 16 “Leases”
• Amendments to References to the Conceptual Framework in International Financial Reporting Standards

The new regulations applicable for the first time in fiscal 2020 did not have a material impact on the consolidated financial statements.

Standards, interpretations and amendments applicable for the first time in fiscal 2021

The following regulations are binding as of fiscal 2021:

• Amendment to IAS 39 “Financial Instruments: Recognition and Measurement”
• Amendments to IFRS 4 “Insurance Contracts”
• Amendment to IFRS 7 “Financial Instruments: Disclosures”
• Amendment to IFRS 9 “Financial Instruments”
• Amendment to IFRS 16 “Leases”

We did not opt for early application of any of these regulations. These regulations are not expected to have a material effect on the consolidated financial statements.

Regulations published but not yet endorsed by the European Union

As of the balance sheet date, the following regulations were published by the IASB but not yet endorsed by the European Union:

• IFRS 17 “Insurance Contracts”
• Amendment to IAS 1 “Presentation of Financial Statements”
• Amendment to IAS 16 “Property, Plant and Equipment”
• Amendment to IAS 37 “Provisions, Contingent Liabilities and Contingent Assets”
• Amendment to IFRS 3 “Business Combinations”
• Amendment to IFRS 17 “Insurance Contracts”
• Annual Improvements to IFRS 2018 – 2020 Cycle

From today’s perspective, the new regulations are not expected to have any material effects on the consolidated financial statements.

Adjustment to the presentation of provisions for employee benefits

To improve comparability and ensure further harmonization with the requirements of the IFRS taxonomy, the presentation of provisions and liabilities in connection with employee benefits was adjusted with effect from January 1, 2020. The balance sheet at the start of the comparative period is presented accordingly.

Provisions for employee benefits previously reported in other non-current provisions were reclassified (January 1, 2019: € 204 million/December 31, 2019: € 237 million) and reported in the item non-current provisions for employee benefits together with provisions for pensions and other post-employment benefits.

The category of current liabilities was expanded to include the item current provisions for employee benefits. This resulted in reclassifications from other current provisions (January 1, 2019: € 112 million/ December 31, 2019: € 110 million).

Without the change in the disclosure of provisions for employee benefits as at December 31, 2020 the other non-current provisions would have amounted to € 566 million and the other current provisions to € 613 million.

Adjustments to the prior-year consolidated balance sheet due to completed purchase price allocations in fiscal 2020

Purchase price allocations for two company acquisitions in 2019 were completed in fiscal 2020, resulting in changes to the fair values of the assets and liabilities acquired. In accordance with IFRS 3, this required the adjustment of the consolidated balance sheet as of December 31, 2019. Further information can be found in Note (6) “Acquisitions and divestments”.

Change of the discount factor for defined benefit pension plans in the eurozone

As of December 31, 2020, the Group changed the way in which it determines the discount factor for defined benefit pension plans in the eurozone. This constitutes a change in an accounting estimate within the meaning of IAS 8. Further information can be found in Note (33) “Provisions for employee benefits”.