Application of new accounting methods

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Accounting standards applied for the first time in financial year 2016/17

The following accounting standards and interpretations revised, amended and newly adopted by the International Accounting Standards Board () that were binding for METRO AG in financial year 2016/17 were applied for the first time in these consolidated financial statements unless the company opted for voluntary early adoption:

IAS 1 (Presentation of Financial Statements)

In the context of the Disclosure Initiative, the following amendments to IAS 1 (Presentation of Financial Statements) were made with respect to the materiality principle, the presentation of the asset position, the income statement or other comprehensive income as well as disclosures in the notes to the financial statements.

In accordance with the materiality principle, information should not be obscured by aggregating information, materiality considerations apply to all parts of a financial statement and the materiality principle is still valid even when a standard requires a specific disclosure.

For one, the changes take into consideration that the list of line items to be presented in the financial statements can be disaggregated and aggregated as relevant and include additional guidance on subtotals in these statements. On the other hand, an entity’s share of other comprehensive income as a group of equity-accounted associates and joint ventures is presented in aggregate using the equity method within the comprehensive income of the group based on whether or not it will subsequently be reclassified to profit or loss. The shares in other comprehensive income of associates or joint ventures are immaterial and are therefore not shown separately.

Moreover, comprehensibility and comparability should be considered when determining the order of the notes.

The above changes have only a minor influence on the disclosures in the consolidated financial statements of METRO AG.

Additional IFRS amendments

The annual improvements to  2012–2014 comprise, among others, a clarification in IAS 34 (Interim Financial Reporting) regarding the disclosure of information “elsewhere in the interim financial report”.

In addition, as part of the improvements, 2 clarifications were made in IFRS 5 (Non-current Assets Held for Sale and Discontinued Operations). If an entity reclassifies an asset (or disposal group) from “held for sale” to “held for distribution” and with this an entity moves from one method of disposal to the other without interruption, this reclassification is seen as a continuation of the original plan of sale. As a result, the entity can continue to apply the accounting requirements applicable to assets (or disposal groups) that are classified as held for sale. The same applies to reclassifications from the category “held for distribution” to the category “held for sale”. The reclassification does not result in an extension of the period in which the sale or distribution must be completed.

Assets (or disposal groups) that no longer satisfy the criteria for recognition as held for distribution must be treated in the same way as an asset that is no longer recognised as held for sale and must no longer be recognised in accordance with IFRS 5.

Other accounting rules to be applied for the first time in financial year 2016/17 without material effects on METRO are:

  •  10/IFRS 12/IAS 28 (Amendment: Investment Entities: Applying the Consolidation Exception)
  • IFRS 11 (Amendment: Accounting for Acquisitions of Interests in Joint Operations)
  • IAS 16/IAS 41 (Change: Amendment: Agriculture Bearer Plants)
  • IAS 16/IAS 38 (Amendment: Clarification of Acceptable Methods of Depreciation and Amortisation)
  • IAS 27 (Amendment: Equity Method in Separate Financial Statements)

IASB (International Accounting Standards Board)
An independent international body that developed the International Financial Reporting Standards (IFRS) and continues to revise them.
Glossary
IFRS (International Financial Reporting Standards)
International rules governing accounting principles. In contrast to the financial statements according to the German Commercial Code, the focus of IFRS is on investor-oriented information.
Glossary
IFRS (International Financial Reporting Standards)
International rules governing accounting principles. In contrast to the financial statements according to the German Commercial Code, the focus of IFRS is on investor-oriented information.
Glossary
Fair value
This refers to the price that would be received to sell an asset or paid to transfer a liability as part of a normal transaction between market participants at the measurement date.
Glossary
Previous year
Period of 12 months, usually cited as reference for statements in the annual report.
Glossary
IASB (International Accounting Standards Board)
An independent international body that developed the International Financial Reporting Standards (IFRS) and continues to revise them.
Glossary
EBIT (Earnings Before Interest and Taxes)
This key figure is used for the international comparison of companies.
Glossary
Wholesale, METRO Wholesale
The METRO Wholesale segment comprises the METRO Cash & Carry sales line of METRO AG with more than 750 wholesale markets across 25 countries worldwide. The delivery business (food service distribution) is also part of this segment, with companies like METRO Delivery Service and the delivery specialists Classic Fine Foods, Pro à Pro and Rungis Express.
Glossary
Retail
The Real sales line of METRO AG operates in the food retail sector and, with 282 stores, it is a leading hypermarket operator in Germany.
Glossary