01 » General
The consolidated financial statements of adidas AG as at December 31, 2020 comprise adidas AG and its subsidiaries and are prepared in compliance with International Financial Reporting Standards (IFRS), as to be applied in the European Union (EU) as at December 31, 2020, and the additional requirements pursuant to § 315e section 1 German Commercial Code (Handelsgesetzbuch – HGB).
The following new standards and interpretations as well as amendments to existing standards and interpretations are effective for financial years beginning on January 1, 2020 and have been applied for the first time to these consolidated financial statements:
- Definition of a Business – Amendment to IFRS 3 (EU effective date: January 1, 2020): The amendment provides additional guidance in order to help entities determine whether they have acquired a business or a group of assets. This amendment did not have an impact on the consolidated financial statements.
- Interest Rate Benchmark Reform – Amendments to IFRS 9, IFRS 7 and IAS 39 (EU effective date: January 1, 2020): The amendments modify specific hedge accounting requirements, so that entities would apply those hedge accounting requirements assuming that the interest rate benchmark on which the hedged cash flows and cash flows from the hedging instrument are based will not be altered as a result of the interest rate benchmark reform. The amendments apply for all hedging relationships that are directly affected by the interest rate benchmark reform. During the financial years 2019 and 2020, adidas did not conclude or possess any hedge instruments which were affected by the changes. Therefore, this amendment did not have any impact on the consolidated financial statements.
- Definition of Material – Amendments to IAS 1 and IAS 8 (EU effective date: January 1, 2020): The amendment clarifies the definition of ‘material’ and aligns the definition used in the Conceptual Framework with the accounting standards themselves. This amendment did not have any material impact on the consolidated financial statements.
- General Amendments – References to the Conceptual Framework (EU effective date: January 1, 2020): The amendments update references to the Conceptual Framework in individual standards. These amendments did not have an impact on the consolidated financial statements.
New standards and interpretations as well as amendments to existing standards and interpretations are usually not applied by adidas before the EU effective date.
The following new standards and interpretations and amendments to existing standards and interpretations issued by the International Accounting Standards Board (IASB), endorsed by the EU, and which are effective for financial years beginning after January 1, 2020, have not been applied in preparing these consolidated financial statements :
- Deferral of IFRS 9 – Amendment to IFRS 4 (IASB effective date: January 1, 2021): The amendment provides two optional solutions to reduce the impact of the differing effective dates of IFRS 9 and IFRS 17. IFRS 4 Insurance Contracts’ is currently not applied by the company. Therefore, the amendment is not expected to have any impact on the consolidated financial statements.
- Interest Rate Benchmark Reform: Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (IASB effective date: January 1, 2021): The amendments offer a practical expedient for financial instrument modifications and lease modifications, specific relief from discontinuing hedging relationships, and the amendment introduces new disclosure requirements. The impacts of the amendment on the consolidated financial statements are currently under evaluation.
- Covid-19- Related Rent Concessions – Amendment to IFRS 16 (EU effective date: June 1, 2020): This amendment provides lessees with the choice of an exemption from assessing whether a COVID-19-related rent concessions are to be treated as lease modifications as defined by IFRS 16. If the exemption is applied, the lessee recognizes the effects of the rent concession in the consolidated income statement in the period in which it occurs. adidas has decided not to apply the exemption; thus, the amendment will not have any impact on the consolidated financial statements.
The following new standards and interpretations as well as amendments to existing standards and interpretations were issued by the IASB. These are not yet endorsed by the EU and hence have not been applied in preparing these consolidated financial statements:
- Insurance Contracts – IFRS 17 including Amendments (IASB effective date: January 1, 2023): The new standard regulates the recognition, measurement, presentation, and disclosure of certain insurance contracts that influence the entity’s financial position, financial performance and cash flows. Insurance contracts which the entity issues, reinsurance contracts the entity holds, and investment contracts with discretionary participation features issued by the entity are all within the scope of the standard. IFRS 17 replaces IFRS 4 ‘Insurance Contracts’, which is currently not applied by the company. Therefore, the standard is not expected to have any impact on the consolidated financial statements.
- Reference to the Conceptual Framework – Amendment to IFRS 3 (IASB effective date: January 1, 2022): The amendment updates the references surrounding the Conceptual Framework and clarifies that an acquirer does not recognize contingent assets acquired in a business combination. The amendment is not expected to have any material impact on the consolidated financial statements.
- Presentation of Financial Statements: Classification of Liabilities as Current or Non-current – Amendment to IAS 1 (IASB effective date: January 1, 2023): The amendment clarifies the classification of current and non-current liabilities when presenting amounts in the statement of financial position. This amendment is not expected to have any material impact on the consolidated financial statements.
- Property, Plant and Equipment: Proceeds before Intended Use – Amendment to IAS 16 (IASB effective date: January 1, 2022): The amendment prohibits deducting any proceeds from selling items produced while bringing the asset to the location and condition necessary for it to be capable of operating from the cost of an item of property, plant and equipment. These are instead recognized in the income statement as they occur. The amendment is not expected to have any material impact on the consolidated financial statements.
- Onerous Contracts: Cost of Fulfilling a Contract – Amendment to IAS 37 (IASB effective date: January 1, 2022): The amendment clarifies the fact that the cost of fulfilling a contract comprises the costs that relate directly to the contract, whether they are incremental costs of fulfilling that contract or an allocation of other costs that relate directly to fulfilling contracts. The amendment is not expected to have any material impact on the consolidated financial statements.
- Annual Improvements to IFRS Standards 2018–2020 (IASB effective date: January 1, 2023): The annual improvements include minor adjustments relating to the Subsidiary as a First-time Adopter (Amendment to IFRS 1), Fees in the ‘10 per cent’ Test for Derecognition of Financial Liabilities (Amendment to IFRS 9), Lease Incentives (Amendment to Illustrative Example 13 of IFRS 16) and Taxation in Fair Value Measurements (Amendment to IAS 41). The improvements are not expected to have any material impact on the consolidated financial statements.
The consolidated financial statements have in principle been prepared on the historical cost basis with the exception of certain items in the statement of financial position such as financial instruments, derivative financial instruments and plan assets, which are measured at fair value.
Business development in 2020 was significantly impacted by the effects of the coronavirus pandemic. Estimates and assumptions relevant to the financial statements were made to the best of our knowledge, based on current events and actions. Due to the ongoing situation, it is difficult to predict the impact on assets and liabilities as well as income and expenses. The impact of the coronavirus pandemic is described in the individual Notes to the consolidated financial statements, if relevant, and include in particular accounts receivable, inventories, property, plant and equipment, right-of-use assets, goodwill, trademarks, financial instruments as well as other operating expenses. NOTE 07 NOTE 09 Note 11 Note 12 Note 13 Note 14 Note 30 Note 32
The consolidated financial statements are presented in euros (€) and, unless otherwise stated, all values are presented in millions of euros (€ in millions). Due to rounding principles, numbers presented may not exactly sum up to totals provided. This can lead to individual amounts rounded to zero.