Summary of accounting policies.
The Deutsche Telekom Group (hereinafter referred to as “Deutsche Telekom” or the “Group”) is one of the world’s leading service providers in the telecommunications and information technology sector. Deutsche Telekom offers its customers all kinds of products and services for connected life and work. The Group reports on the four operating segments Germany, United States, Europe, and Systems Solutions, as well as on Group Headquarters & Group Services.
The Company was entered as Deutsche Telekom AG in the commercial register of the Bonn District Court (Amtsgericht – HRB 6794) on January 2, 1995.
The Company has its registered office in Bonn, Germany. Its address is Deutsche Telekom AG, Friedrich-Ebert-Allee 140, 53113 Bonn.
The declaration of conformity with the German Corporate Governance Code required pursuant to § 161 of the German Stock Corporation Act (Aktiengesetz – AktG) was released and made available to shareholders. The Declaration of Conformity can be found on the Deutsche Telekom website (www.telekom.com) via the following path: Investor Relations/Corporate Governance/Declaration of Conformity.
The shares of Deutsche Telekom AG are traded on the Frankfurt/Main Stock Exchange as well as on other German stock exchanges.
The annual financial statements of Deutsche Telekom AG as well as the consolidated financial statements of Deutsche Telekom AG, which have an unqualified audit opinion from PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Frankfurt/Main, are published in the electronic Federal Gazette (elektronischer Bundesanzeiger). The annual report is available upon request from Deutsche Telekom AG, Bonn, Investor Relations, and on Deutsche Telekom’s homepage at www.telekom.com.
The consolidated financial statements of Deutsche Telekom for the 2013 financial year were released for publication by the Board of Management on February 18, 2014.
The consolidated financial statements of Deutsche Telekom have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), as well as with the regulations under commercial law as set forth in § 315a (1) of the German Commercial Code (Handelsgesetzbuch – HGB). However, the consolidated financial statements of Deutsche Telekom as of December 31, 2013 do not fully comply with IFRS as issued by the IASB. In May 2011, the IASB published three new IFRSs (IFRS 10, IFRS 11, IFRS 12) and one revised standard (IAS 28) that govern the accounting for investments in subsidiaries, joint arrangements, and associates (please refer to “Standards, interpretations and amendments issued, but not yet adopted”). In accordance with an IASB decision, these standards are to be applied for financial years beginning on or after January 1, 2013. Application of the provisions within the European Union is, however, not mandatory before financial years beginning on or after January 1, 2014. The term IFRS is consistently used in the following.
The financial year corresponds to the calendar year. Due to the retrospective application of amended IAS 19 “Employee Benefits,” a further comparative year was included in the consolidated statement of financial position to show two prior years. The consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, and the consolidated statement of cash flows include two comparative years.
Presentation in the statement of financial position differentiates between current and non-current assets and liabilities, which are generally broken down further by their respective maturities in the notes to the consolidated financial statements. The consolidated income statement is presented using the cost-of-sales method. Under this format, net revenue is compared against the expenses incurred to generate these revenues, classified into cost of sales, selling, and general and administrative functions. The consolidated financial statements are prepared in euros.
The financial statements of Deutsche Telekom AG and its subsidiaries included in the consolidated financial statements were prepared using uniform group accounting policies.
Initial application of standards, interpretations, and amendments to standards and interpretations in the financial year.
In the 2013 financial year, Deutsche Telekom applied the following IASB pronouncements and/or amendments to such pronouncements for the first time:
|IFRS 13||Fair Value Measurement|
|IAS 1||Presentation of Financial Statements|
|IAS 19||Employee Benefits|
|IFRS 7||Financial Instruments: Disclosures|
|Annual Improvements Project||Annual Improvements to IFRSs 2009–2011 Cycle|
||Recoverable Amount Disclosures for Non-Financial Assets|
In May 2011, the IASB issued IFRS 13 “Fair Value Measurement.” With IFRS 13, the IASB has created a uniform, comprehensive standard for fair value measurement. IFRS 13 provides guidance on how to measure at fair value when other IFRSs require fair value measurement (or disclosure). A new definition of fair value applies which characterizes it as the selling price of an actual or hypothetical transaction between any independent market participants under normal market conditions on the reporting date. The standard is almost universally applicable, with the only exemptions being IAS 2 “Inventories,” IAS 17 “Leases,” and IFRS 2 “Share-based Payment.” While the scope of the guidance remains virtually unchanged for financial instruments, the guidance for other items (e.g., investment property, intangible assets, and property, plant and equipment) is now more comprehensively and/or precisely defined. The established three-level fair value hierarchy has to be applied across the board. Accordingly, the hierarchical level to which the asset or liability is assigned in its entirety (Level 1, Level 2, or Level 3) is determined based on the lowest input parameter in the hierarchy. If measurement factors from different levels are used, the asset or liability is to be categorized in its entirety to the lowest level. The highest hierarchical level (Level 1) is assigned to inputs that are quoted prices in active markets and that the entity can access at the measurement date. The second-highest hierarchical level (Level 2) is assigned to inputs that are observable either directly or indirectly or can be derived, other than quoted market prices included within Level 1. The lowest hierarchical level (Level 3) is assigned to assets or liabilities the measurement of which is based at least on one input parameter that cannot be observed. The adoption of IFRS 13 results in additional disclosures in Deutsche Telekom’s financial statements. The European Union endorsed the provisions in December 2012. IFRS 13 is effective for financial years beginning on or after January 1, 2013.