Judgements, estimates and assumptions
The preparation of the consolidated financial statements was based on a number of judgements, estimates and assumptions that had an effect on the value and presentation of the reported assets, liabilities, income and expenses as well as contingent liabilities.
Information on the key discretionary decisions that materially affected the amounts reported in these consolidated financial statements can be found in the following notes:
- Determination of the consolidation group by assessing control opportunities (chapter "consolidation group"). Aside from structured entities (special purpose entities), this particularly concerns investments where the control opportunity is not necessarily tied in with a simple majority of voting rights due to special regulations in the Articles of Association.
- Classification of leases as finance leases or operating leases – including sale-and-lease-back transactions (no. 2 – other operating income and no. 21 – property, plant and equipment)
- Classification of real estate assets as investment properties (no. 22 – investment properties)
- Classification of financial instruments to the category “held to maturity” (no. 41 – carrying amounts and fair values according to measurement categories)
Estimates and assumptions
Information on estimates and underlying assumptions with significant effects on these consolidated financial statements is included in the following notes:
- Uniform group-wide determination of useful lives for assets with a definite useful life (no. 15 – depreciation/amortisation/impairment losses, no. 20 – other intangible assets and no. 21 – property, plant and equipment)
- Impairment testing of assets with a definite useful life if warranted by events (no. 15 – depreciation/amortisation/impairment losses, no. 20 – other intangible assets and no. 21 – property, plant and equipment)
- Annual goodwill impairment tests (no. 19 – goodwill –including sensitivity analyses)
- Recoverability of receivables – particularly receivables due from suppliers (no. 24 – other financial and non-financial assets)
- Recognition of supplier compensation on an accrual basis (no. 24 – other financial and non-financial assets)
- Ability to realise future tax receivables – particularly from tax loss carry-forwards (no. 25 – deferred tax assets/deferred tax liabilities)
- Measurement of inventories (no. 26 – inventories)
- Determination of pension provisions (no. 33 – provisions for pensions and similar obligations)
- Determination of other provisions – for example, for deficient rental cover, restructuring, warranties, taxes and risks emerging from legal proceedings and litigation (no. 34 – other provisions [non-current]/provisions [current])
Although great care has been taken in making these estimates and assumptions, actual values may deviate from them in individual cases. The estimates and assumptions used in the consolidated financial statements are regularly reviewed. Changes are taken into account at the time new information becomes available.