Standards, interpretations, and amendments issued, but not yet to be applied




To be applied by Deutsche Telekom from


Expected impact on the presentation of Deutsche Telekom’s results of operations and financial position


For standards not yet endorsed by the EU, the date of first-time adoption scheduled by the IASB is assumed for the time being as the likely date of first-time adoption.





January 1, 2019

IFRS 16 principally requires lessees to recognize assets and liabilities for all leases and the rights and obligations associated with these leases in the statement of financial position. Going forward, lessees will therefore no longer be required to make the distinction between finance and operating leases that was required in the past in accordance with IAS 17. For all leases, the lessee will recognize a lease liability in its statement of financial position for the obligation to make future lease payments. At the same time, the lessee will capitalize a right of use to the underlying asset which is equivalent to the present value of the future lease payments plus initial direct costs, directly attributable expenditure, advance payments and restoration costs, as well as less incentive payments received. Similar to the guidance on finance leases in IAS 17, the lease liability will be adjusted over the lease term for any remeasurement, while the right-of-use asset will be depreciated, which in contrast to the current lease expense normally leads to higher expenses at the inception date of a lease. For the lessor, on the other hand, the provisions of the new standard are similar to the existing guidance in IAS 17. IFRS 16 also includes new provisions on the definition of a lease and its presentation, on disclosures in the notes, and on sale and leaseback transactions.

The standard has a material effect on the presentation of Deutsche Telekom’s results of operations and financial position. The effects are detailed in the explanations following this table.

Amendments to IAS 28

Long-term Interests in Associates and Joint Ventures

January 1, 2019

The amendments clarify that an entity applies IFRS 9 including its impairment requirements to long-term interests in an associate or joint venture that form part of the net investment in the associate or joint venture but are not accounted for using the equity method.

No material impact.

Amendments to IFRS 9

Prepayment Features with Negative Compensation

January 1, 2019

The amendment sets out that, if certain conditions are met, financial assets can be measured at amortized cost or fair value through other comprehensive income if, in the case of an early termination, compensation is required to be paid to the party that triggers the early termination of the contract.

No material impact.


Uncertainty over Income Tax Treatments

January 1, 2019

IFRIC 23 brings clarity to IAS 12 “Income Taxes” in relation to the recognition and measurement of current income taxes, deferred tax assets, and deferred tax liabilities if there is uncertainty regarding the treatment of income taxes.

No material impact.

IFRSs not yet endorsed by the EUa


Amendments to IAS 19

Plan Amendment, Curtailment or Settlement

January 1, 2019

The amendments change the guidance on the amendment, curtailment or settlement of a defined benefit pension plan. Clarification that an entity is required to determine current service cost and the net interest for the remainder of the reporting period after a plan amendment, curtailment or settlement using updated actuarial assumptions and the net liability (or net asset) at the time of the intervention; any changes in a surplus as part of past service cost or as a gain or loss on settlement must be recognized in profit or loss, even if this surplus had not been previously disclosed due to the effect of the asset ceiling. The effects of changes in the asset ceiling are recognized in other comprehensive income.

No material impact.

Annual Improvements Project

Annual Improvements to IFRSs 2015–2017 Cycle

January 1, 2019

Clarification of many published standards.

No material impact.

Amendments to References to the Conceptual Framework

References to the Conceptual Framework

January 1, 2020

Updating of the cross references to the revised conceptual framework in the corresponding standards and interpretations.

No material impact.

Amendments to IFRS 3

Business Combinations

January 1, 2020

Changes in the definition of a business for clarifying how a company determines whether it has acquired a business or a group of assets.

No material impact.

Amendments to IAS 1 and IAS 8

Definition of Material

January 1, 2020

Clarification of the definition of materiality.

No material impact.


Insurance Contracts

January 1, 2021

IFRS 17 governs the accounting for insurance contracts and replaces IFRS 4.

No material impact.

In January 2016, the IASB issued IFRS 16 “Leases.” The standard will be effective for the first time for financial years beginning on or after January 1, 2019. IFRS 16 has a material effect on Deutsche Telekom’s consolidated financial statements, particularly on total assets, the results of operations, cash generated from operations, and the presentation of the financial position.

The new regulations affect Deutsche Telekom as a lessee especially in relation to leases of cell sites (land, space in cell towers or rooftop surface areas), network infrastructure, and buildings used for administrative or technical purposes.

Deutsche Telekom will not apply the new lease standard retrospectively in full, but will make use of the exemption provisions for lessees, also known as the modified retrospective method. On the transition to IFRS 16, payment obligations from existing operating leases will be discounted using the relevant incremental borrowing rate and recognized as a lease liability. The right-of-use assets will be carried as of January 1, 2019 in the amount of the lease liability, adjusted by the amount of the or accrued lease payments. Due to the significant amount of liabilities from straight-line leases in accordance with IAS 17, which in accordance with IFRS 16 must be deducted from the right-of-use assets, the right-of-use assets as of January 1, 2019 under IFRS 16 will be carried at a significantly lower amount than the corresponding lease liability (see Note 16 “Other liabilities”). This liability primarily relates to leases for T-Mobile US’ cell sites. As of the transition date of January 1, 2019, first of all, the lease terms underlying the liabilities will be adjusted to the terms determined in accordance with IFRS 16, increasing shareholders’ equity. The remaining prepaid expense will be offset against the right-of-use asset as described above.

In the statement of cash flows, the repayment portion of the lease payments from existing operating leases will reduce net cash from/used in financing activities and no longer affect net cash from operating activities. Only the interest payments will remain in net cash from operating activities, the total of which will rise.

The full effects of IFRS 16 were determined as part of a Group-wide project for implementing the new standard. On the basis of management’s current estimate, Deutsche Telekom expects the transition to the new standard to have the following material effects as of January 1, 2019. It should be noted that the expectations stated regarding the items of the statement of financial position may be subject to deviations of +/-5 percentage points:

  • The increase in total assets/total liabilities and shareholders’ equity as of January 1, 2019 as a consequence of the recognition of right-of-use assets in the amount of EUR 13,8 billion, the recognition of lease liabilities in the amount of EUR 15.4 billion, and a reduction in retained earnings, due in particular to the reversal of accrued lease payments (liabilities from straight-line leases) of EUR 0.5 billion (before deferred taxes). The increase in lease liabilities will lead to a corresponding increase in net debt.
  • Depreciation charges that are around EUR 2.8 billion higher and interest expense that is around EUR 0.7 billion higher will be reported in the income statement in place of lease expense; this is expected to give rise to a significant improvement in EBITDA of around EUR 3.4 billion. The expected effects will be exclusively attributable to the balance as of January 1, 2019.

Significant options and expedients will be exercised as follows:

  • Right-of-use assets and lease liabilities will be reported separately in the statement of financial position.
  • The recognition, measurement, and disclosure requirements of IFRS 16 also apply to short-term leases and leases of low-value assets.
  • A distinction will not be made in leases that contain both lease components and non-lease components. Each lease component will be accounted for together with other related performance components as a single lease component.
  • Leases for intangible assets fall under IAS 38 rather than under IFRS 16.

In addition, on the date of first-time adoption of IFRS 16, use will be made of the main options and expedients as follows:

  • Provisions for onerous contracts recognized in connection with leases will be derecognized on January 1, 2019 against the right-of-use asset.
  • In determining the lease term, hindsight may be used where this provides a better estimate for the exercise of options to extend or terminate the lease.
  • Use will not be made of grandfathering. On January 1, 2019, the lease standard will therefore be applied to all existing leases falling within its scope. It will apply to leases in which Deutsche Telekom is a lessee and to leases in which the Group is a lessor

Overall, the new definition of a lease will not have a material impact for Deutsche Telekom as a lessor. However, the number of identified leases will change. The new definition does not affect the contracts for servers or similar hardware provided to customers as part of data and network solutions or contracts for terminal equipment and SmartHome network solutions provided to customers. These will continue to be defined as leases. However, the number of leases for contracts involving modems/routers for the latest generation of devices provided to consumers as part of fixed-network mass-market contracts is expected to decrease. In relation to services provided in data centers, the leasing of space, for example separate rooms for setting up the customer’s own hardware, will be identified as a component of a lease. Furthermore, the leasing of local loop lines and space to wholesale fixed-network customers (e.g., co-location space) will also be classified as a lease.

Readers are also referred to the Disclaimer at the end of this report as regards the forward-looking statements contained in this section; the latter reflect the current views of the management of Deutsche Telekom with regard to future events.

In contrast to postpay contracts, prepay communication services are services for which credit has been purchased in advance with no fixed-term contractual obligations.