Please activate JavaScript!
Please install Adobe Flash Player, click here for download

Deutsche Telekom AG - Interim Group report - January 1 to March 31, 2011

55Interim consolidated financial statements Accounting policies. In accordance with § 37x (3) of the Securities Trading Act (Wertpapierhan- delsgesetz – WpHG), Deutsche Telekom AG’s quarterly financial report com- prises interim consolidated financial statements and an interim management report for the Group. The interim consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRSs) appli­cable to interim financial reporting as adopted by the EU. The interim management report for the Group was prepared in accordance with the applicable provisions of the WpHG. Statement of compliance. The interim consolidated financial statements for the period ended March 31, 2011 are in compliance with International Accounting Standard (IAS) 34. As permitted by IAS 34, it has been decided to publish a condensed version com- pared to the consolidated financial statements at December 31, 2010. All IFRSs applied by Deutsche Telekom have been adopted by the European Commis- sion for use within the EU. In the opinion of the Board of Management, the reviewed quarterly financial report includes all standard adjustments to be applied on an ongoing basis that are required to give a true and fair view of the results of operations, financial position and cash flows of the Group. Please refer to the notes to the consoli- dated financial statements as of December 31, 2010 for the accounting policies applied for the Group’s financial reporting. The United States operating segment (T-Mobile USA) is reported as a discon- tinued operation as at March 31, 2011. The consolidated income statement has been adjusted accordingly with retroactive effect. For a more detailed explana- tion, please refer to the section “Selected notes to the consolidated statement of financial position.” Initial application of standards, interpretations and amendments to standards and interpretations in the reporting period. In October 2009, the IASB issued an amendment to IAS 32 “Financial Instru- ments: Presentation.” The European Union endorsed this amendment in December 2009. This amendment clarifies the classification of rights issues as equity or liabilities when the rights are denominated in a currency other than the issuer’s functional currency. Previously, such rights issues had been accounted for as derivative liabilities. The amendment requires that if such rights are issued pro rata to an entity’s shareholders for a fixed amount of cur- rency, they are to be classified as equity regardless of the currency in which the exercise price is denominated. The amendment is effective for financial years beginning on or after February 1, 2010. The amendment did not have a material impact on the presentation of Deutsche Telekom’s results of operations, finan- cial position or cash flows. In November 2009, the IASB issued an amendment to its requirements on ac- counting for pension plans. The European Union endorsed the amendment in July 2010. The amendment is to IFRIC 14 “Prepayments of a Minimum Fund- ing Requirement,” which is an interpretation of IAS 19 “Employee Benefits.” The amendment applies in limited circumstances when an entity is subject to minimum funding requirements and makes an early payment of contributions to cover these requirements. It permits such an entity to treat the benefit of such an early payment as an asset. The amendment has an effective date for manda- tory adoption of January 1, 2011. Retrospective adoption is required. The adop- tion of IFRIC 14 did not have a material impact on the presentation of Deutsche Telekom’s results of operations, financial position or cash flows. In November 2009, the IASB issued the interpretation IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments.” The European Union endorsed IFRIC 19 in July 2010. The interpretation provides guidance on how to interpret IFRS when an entity renegotiates the terms of a financial liability with its credi- tor and the creditor agrees to accept equity instruments to settle the financial liabilities fully or partially. IFRIC 19 clarifies that the entity’s equity instruments issued to a creditor are part of the consideration paid to extinguish the financial liability fully or partially. In addition, these equity instruments are measured at their fair value. If their fair value cannot be reliably measured, the equity instru- ments shall be measured to reflect the fair value of the financial liability extin- guished. Any difference between the carrying amount of the financial liability and the initial measurement amount of the equity instruments issued is in- cluded in the entity’s profit/loss for the period. The interpretation is effective for financial years beginning on or after July 1, 2010. The adoption of IFRIC 19 did not have a material impact on the presentation of Deutsche Telekom’s results of operations, financial position or cash flows. In May 2010, the IASB published pronouncements as part of its third Annual Improvements Project containing amendments to six standards and one interpretation. The European Union endorsed the amendments in February 2011. The amendments do not have a material impact on the presentation of Deutsche Telekom’s results of operations, financial position or cash flows and are effective for financial years beginning on or after January 1, 2011. Significant events and transactions.