Comparability with the first half of 2017
After due consideration is given to the following issues, the financial information presented for the first half of 2018 is comparable with the financial information for the first half of 2017:
- Change of method regarding the recognition of pension obligations in the DB Arriva segment
In Great Britain, some rail transport agreements are operated as franchises, for the duration of which DB Group pays contributions into the British railway pension scheme for the employees deployed in such arrangements. As was the case in the previous year, the obligations to these employees as well as the plan assets are completely disclosed after deduction of the element financed by the employees (40%).
The process of recognizing the effects due to franchise agreements also included until now that part of the shortfall or surplus cover which will probably not be financed by DB Group. Personnel expenses also include the service cost resulting from the application of the projected unit credit method.
As a result of the lower level of interest rates, DB Group has established that these two valuation rules no longer provide a true and fair view of the net assets and results of operations. The current contributions actually paid are now disclosed as personnel expenses. After taking account of the effects due to franchise agreements, there will in future only be the obligations resulting from the payment of contributions for reducing any deficit in the pension scheme during the current franchise. If such an obligation exists at the time at which a franchise transport agreement commenced, this is capitalized in the amount of an intangible asset which is written down over the duration of the franchise.
The following table shows the impact on the consolidated interim financial statements as of June 30, 2017 resulting from the retrospective application.
As of Jun 30, 2017 (€million) | Adjusted method | Previous | Absolute |
Items of the balance sheet | |||
Intangible assets | 3,576 | 3,567 | +9 |
Receivables and other assets (non-current) | 368 | 668 | –300 |
Reserves | 3,865 | 3,927 | –62 |
Retained earnings | 7,165 | 7,187 | –22 |
Pension obligations | 3,958 | 3,947 | +11 |
Deferred items (non-current) | 855 | 1,043 | –188 |
Deferred tax liabilities | 151 | 153 | –2 |
Deferred items (current) | 891 | 919 | –28 |
In the items of the income statement, there have not been any major changes.
In the segment information broken down according to operating segments and also the information relating to regions, the figures of the first half of 2017 have been adjusted accordingly.
- Review of useful lives relevant to the segment DB Netze Track
At the beginning of 2018, DB Group carried out a review of the useful lives recognized for depreciation purposes in order to determine the extent to which they reflect actual wear and tear. The review resulted in the recognition of higher useful lives in the case of some asset classes, which meant that depreciation in the first half of 2018 was lower than in the corresponding previous year period.