The consolidated financial statements of Deutsche Lufthansa AG, Cologne, and its subsidiaries have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), taking account of interpretations by the International Financial Reporting Interpretations Committee (IFRIC) as applicable in the European Union (EU).
Following the amendment to IAS 27 Consolidated and Separate Financial Statements, purchases and sales of shares after taking control and for as long as control exists are to be recognised using the economic entity approach. These kinds of transactions are treated as taking place at the level of the shareholders and are recognised in equity without effect on profit and loss. Lufthansa had previously exercised the existing option in this way.
The revised IFRS 3 Business Combinations includes rules on the scope of application, components of acquisition cost, dealing with minority interests and goodwill, and the recognition of assets, liabilities and contingent liabilities. As no business combinations within the meaning of IFRS 3 took place in the 2010 financial year, these amendments had no effect on the net assets, financial and earnings position of the Group.
Following the amendment to IAS 39 Financial Instruments: Recognition and Measurement, from the financial year 2010 onwards it is no longer possible to recognise the change in total market value of an option used as a hedge (full fair value method) without effect on income as part of hedge accounting, but only the “intrinsic value” of the option. The change in the “time value” is recognised in the financial result, which leads to corresponding fluctuations in net profit/loss for the period. This has no effect on realised hedging gains or losses on hedged items. Changes in the time value of the options are always equalised in full at the time of realisation, because the time value of the hedging combinations most
commonly used is always zero when the hedging transaction is closed and when the financial derivative is realised. This therefore has no effect on the Group’s assets and financial position. The Lufthansa Group is presenting the changes retrospectively as of the 2010 financial year, i.e. the previous year’s figures have been adjusted as if the amended IAS 39 had already been applied at that point in time. If the amended IAS 39 had been applied in the financial year 2009, the profit/loss before income taxes would have been EUR 95m higher and the net profit after income taxes would have been EUR 78m higher.
The following standards and interpretations applicable as of 1 January 2010 did not have a significant effect on the Group’s net assets, financial and earnings position in the reporting period.
The amendments to IFRS 2 Group Cash-settled Share-based Payment Transactions on the scope of the standard and to the IFRS for Small and Medium-sized Enterprises had no effect on the net assets, financial and earnings position of the Group.
Furthermore, the Annual Improvement Project 2009 made a number of changes to the wording of the existing standards IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, IFRS 8 Operating Segments, IAS 1 Presentation of Financial Statements, IAS 7 Statement of Cash Flows, IAS 17 Leases, IAS 36 Impairment of Assets and IAS 39 Financial Instruments: Recognition and Measurement. Some of these amendments are binding for financial years beginning on or after 1 July 2009. This concerns amendments to IFRS 2 Share-based Payment, IAS 38 Intangible Assets, IFRIC 9 Reassessment of Embedded Derivatives and IFRIC 16 Hedges of a Net Investment in a Foreign Operation.
The amendments to IFRS 1 First-time Adoption of IFRS are not relevant for the Group. The same applies to IFRIC 12 Service Concession Arrangements, which governs the accounting treatment of contracts awarded by public authorities to private companies for the supply of public services.
The interpretation IFRIC 15 Agreements for the Construction of Real Estate defines the transactions for which IAS 18 Revenue or IAS 11 Construction Contracts apply.
IFRIC 16 Hedges of a Net Investment in a Foreign Operation deals with the balance sheet disclosure of hedges for investments in companies whose functional currency is not the Group currency.
IFRIC 17 Distributions of Non-cash Assets to Owners governs the accounting treatment of distributions in kind to parties outside the Group.
IFRIC 18 Transfers of Assets from Customers was published in January 2009, primarily for the benefit of the energy sector.
IFRIC 15, 16, 17 and 18 are not currently relevant for the Lufthansa Group.
The commercial law provisions of Section 315a Paragraph 1 of the German Commercial Code (HGB) have also been applied. All IFRSs issued by the IASB and in effect at the time that these financial statements were prepared and applied by Deutsche Lufthansa AG have been adopted by the European Commission for application in the EU. The consolidated financial statements of Deutsche Lufthansa AG, denominated in EUR million, therefore comply with the IFRSs as applicable in the EU and with the further commercial law provisions of Section 315a Paragraph 1 HGB.
These consolidated financial statements for 2010 are to be examined and approved by the Supervisory Board of Deutsche Lufthansa AG in its meeting on 16 March 2011 and are then authorised for publication.