2. Basis of preparation
The principal accounting policies applied in the preparation of these Consolidated Financial Statements for the fiscal year from January 1, 2021, to December 31, 2021 are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
The Consolidated Financial Statements have been prepared in euros. Unless otherwise indicated, all amounts are stated in thousands of euros (EUR thousands). All amounts have been rounded. Therefore, in individual cases, differences in the order of one thousand euros may arise when adding individual values to the total value.
The Consolidated Financial Statements of NORMA Group have been prepared in accordance with International Financial Reporting Standards and the relevant interpretations as adopted by the EU (IFRS) as well as with the regulations under commercial law as set forth in Section 315e of the German Commercial Code (HGB) for the year ended December 31, 2021.
The Consolidated Statement of Comprehensive Income has been prepared in accordance with the total cost method.
The Consolidated Financial Statements of NORMA Group SE were prepared by the Management Board on March 10, 2022, and are scheduled to be released for publication after approval by the Supervisory Board on March 17, 2022.
The Consolidated Financial Statements of NORMA Group are being filed with and published in the German Federal Gazette (Bundesanzeiger).
The preparation of financial statements in conformity with IFRS requires the Management Board the use of certain accounting estimates. It is also required to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity or areas where assumptions and estimates are significant to the Consolidated Financial Statements are disclosed in Note 6 ‘Critical Accounting Estimates and Judgments’.
Accounting standards applied for the first time in the current fiscal year
The Group has applied the following standards and amendments for the first time:
Amendments to IFRS 9 and IFRS 16 due to the
Interest Rate Benchmark Reform – Phase 2
COVID-19 related rent concessions
In May 2020, the IASB issued COVID-19-Related Rent Concessions - Amendment to IFRS 16 Leases. The amendments introduce an optional practical expedient that simplifies how a lessee accounts for rent concessions that are a direct consequence of COVID-19. A lessee that applies the practical expedient is not required to assess whether eligible rent concessions are lease modifications, and accounts for them in accordance with other applicable guidance. The practical expedient will only apply if:
the revised consideration is substantially the same or less than the original consideration;
the reduction in lease payments relates to payments due on or before 30 June 2021; and
no other substantive changes have been made to the terms of the lease.
In response to the ongoing impact of the COVID-19 pandemic, the IASB amended IFRS 16 Leases on March 31, 2021, to provide a one-year extension of the practical expedient to assist lessees in accounting for COVID-19-related lease concessions. The amendments extend the practical expedient to lease concessions that reduce lease payments originally due on or before June 30, 2022 (previously, only lease concessions that reduce lease payments that are or were due on or before June 30, 2021, were within the scope of the expedient).
The amendments are effective for reporting periods beginning on or after April 1, 2021, with earlier application permitted.
NORMA Group has not made use of the option in the fiscal year and treats lease concessions as a modification under IFRS 16 if necessary.
The standards and amendments applied for the first time have no impact on NORMA Group's Consolidated Financial Statements.
Standards, amendments and interpretations to existing standards that are not yet effective and have not been applied early by the Group.
The IASB has issued a number of other pronouncements. These recently implemented accounting pronouncements as well as the pronouncements that have not yet been implemented have no material impact on NORMA Group's Consolidated Financial Statements.
These contents are part of the Non-financial Group Report and were subject to a separate limited assurance examination.