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-leaseback transactions (no. 2 – other operating income and no. 20 – property, plant and equipment)
- Determination whether METRO is the principal or agent in sales transactions (no. 1 – sales)
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. 14 – depreciation/amortisation/impairment losses, no. 19 – other intangible assets and no. 20 – property, plant and equipment)
- Impairment testing of assets with a definite useful life if warranted by events (no. 14 – depreciation/amortisation/impairment losses, no. 19 – other intangible assets and no. 20 – property, plant and equipment)
- Annual goodwill impairment tests (no. 18 – goodwill – including sensitivity analyses)
- Recoverability of receivables – particularly receivables from suppliers (no. 23 – other financial and non-financial assets)
- Recognition of supplier compensation on an accrual basis (no. 23 – other financial and non-financial assets)
- Ability to realise future tax receivables – particularly from tax loss carry-forwards (no. 24 – deferred tax assets/deferred tax liabilities)
- Measurement of inventories (no. 25 – inventories)
- Determination of provisions for post-employment benefits plans (no. 32 – provisions for post-employment benefits plans and similar obligations)
- Determination of other provisions – for example, for deficient rental cover and onerous contracts, restructuring, warranties, taxes and risks emerging from legal proceedings and litigation (no. 33 – other provisions [non-current]/provisions [current])
- Estimation of the expected date of conclusion of a transaction with respect to the classification as non-current assets held for sale, liabilities related to assets held for sale and discontinued operations (no. 30 – assets held for sale / liabilities related to assets held for sale)
- Estimation of the probability of utilisation from supplier liabilities (no. 35 – trade liabilities)
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 in to account at the time new information becomes available. In the reporting year a positive EBIT effect of €20 million resulted from an adjusted estimate of the possibility of utilising short-term liabilities.