Effects of new and amended IFRSs

Effects of new and amended IFRSs

Volkswagen AG has applied all accounting pronouncements adopted by the EU and effective for periods beginning in fiscal year 2024.

Since January 1, 2024, amendments to IAS 1 clarifying the classification of liabilities as current or non-current have had to be applied. This affects in particular liabilities whose due date is linked to certain covenants. A decisive criterion for classification is whether there is a contractual right as of the reporting date to defer settlement by at least 12 months.

Amendments to IAS 7/IFRS 7 have also been applicable since January 1, 2024; these require additional disclosures in the notes on supplier finance arrangements – in particular reverse factoring arrangements. The intention is to make the effect of these arrangements on liabilities, cash flows and liquidity risks more transparent. In 2024, the first year of application, no disclosures had to be made or adjusted in relation to prior years. No such disclosures had to be included in the interim financial reports either, meaning that they were made to the extent required for the first time as of December 31, 2024. Further information on reverse factoring can be found in the “Accounting policies”, “Trade payables” and “Financial risk management and financial instruments” sections.

In addition to this, amendments were made to IFRS 16 and have also been applicable since January 1, 2024. In essence, the purpose of these amendments is to require variable lease payments under a sale and leaseback transaction that are not based on an index or interest rate to be recognized as a lease liability.

The amendments referred to above do not materially affect the Volkswagen Group’s net assets, financial position and results of operations.

New and amended IFRSs not applied

In its 2024 consolidated financial statements, Volkswagen AG did not apply the following accounting pronouncements that have been adopted by the IASB until December 31, 2024, but were not yet required to be applied for the fiscal year.

Prior-year corrections in accordance with IAS 8

It was found during the reporting year that obligations related to the granting of fringe benefits had not been included in full when calculating the provision for time assets. The error was corrected in accordance with IAS 8 by adjusting the affected items accordingly in the consolidated financial statements for the prior years.

The retrospective correction resulted in a change in equity as of December 31, 2023/January 1, 2024 and January 1, 2023, respectively. This is attributable to the increase in other provisions and the recognition of deferred tax assets. The recognition of the additional fringe benefits did not have a material impact on the income statement, the statement of comprehensive income, or the cash flow statement. The prior-year figures have been adjusted accordingly.

The tables below summarize the effects on the balance sheet.