Accounting policies

These consolidated financial statements for the financial year from 1 July 2020 to 30 June 2021, including the prior-year information, were prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted in the European Union and in force at the end of the reporting period, and the supplementary provisions of German commercial law required to be observed in accordance with § 315e (1) HGB. The term “IFRS” includes the recent International Financial Reporting Standards (IFRSs) and the International Accounting Standards (IASs) issued by the International Accounting Standards Board (IASB) in London as well as the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) and the Standing Interpretations Committee (SIC).

Borussia Dortmund applied the following Standards, Interpretations and amendments to existing Standards, as adopted by the European Union, for the first time in the 2020/2021 financial year:

Amendments to References to the Conceptual Framework in IFRS Standards

The revised Conceptual Framework comprises a new, overarching section entitled “Status and purpose of the conceptual framework” and eight distinct chapters. The Framework now includes chapters relating to “The reporting entity” and “Presentation and disclosure”; the “Recognition” chapter has been expanded to include “Derecognition”.

Substantive amendments were also made: for instance, the distinction between revenues on the one hand and gains on the other is no longer drawn for income.

As part of the amendments to the Conceptual Framework, references to the Conceptual Framework in various standards have been amended.

The amendments did not have any material impact on the consolidated financial statements of Borussia Dortmund.

Amendments to IFRS 3 – Definition of a Business

The IASB’s amendment clarifies that a business comprises a set of activities and assets which must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. Furthermore, the definition of outputs is narrowed by focusing on goods and services provided to customers and by removing the reference to an ability to reduce costs. The new provisions furthermore include an optional concentration test that permits a simplified assessment of whether an acquired set of activities and assets is not a business.

The amendments did not have any material impact on the consolidated financial statements of Borussia Dortmund.

Amendment to IFRS 9, IAS 39 and IFRS 7 – Interest Rate Benchmark Reform

These amendments were issued to address existing uncertainties in connection with the IBOR reform. Under the present hedge accounting rules, the upcoming changes in benchmark rates would in many instances result in the termination of hedges. Now it is possible to continue existing hedge accounting relationships for a transitional period. To that end, the amendments provide for specific mandatory exceptions to previous hedge accounting rules, such as rules pertaining to the assessment of the “highly probable” criterion in the context of expected transactions as part of cash flow hedges.

The amendments did not have any material impact on the consolidated financial statements of Borussia Dortmund.

Amendments to IAS 1 and IAS 8 – Definition of Material

The amendments create a uniform and more consistent definition of materiality of information presented in financial statements in the IFRSs and provide accompanying examples. In that connection, the definitions set out in the Conceptual Framework, IAS 1, IAS 8 and IFRS Practice Statement 2 “Making Materiality Judgements” have been aligned.

The amendments did not have any material impact on the consolidated financial statements of Borussia Dortmund.

Amendments to IFRS 16 – Covid-19-Related Rent Concessions

IFRS contains provisions relating to the presentation of changes in lease payments (including rent concessions) by the lessee. The lessee must generally assess for each lease whether the rent concessions granted constitute a modification of the lease and must remeasure the lease liability resulting from any such modifications.

The Amendment to IFRS 16 offers a practical expedient in the event rent concessions are utilised. This is subject to certain requirements and available for a limited time. The expedient permits lessees to account for rent concessions granted in connection with the COVID-19 pandemic not as lease modifications but rather as though there had been no modification to the lease.

Borussia Dortmund has made use of the option enshrined in “Amendment to IFRS 16 – Covid-19-Related Rent Concessions” to not present rent concessions granted in connection with COVID-19 as a modification. The applied option relates solely to three properties leased by BVB Merchandising GmbH. In total, changes in rent payments recognised through profit or loss amounted to EUR 66 thousand. These were recognised under other operating income.

Amendments to IFRS 4 – Extension of the Temporary Exemption from Applying IFRS 9 (“deferral of IFRS 9”)

The Amendments to IFRS 4 are intended to address the temporary accounting issues caused by the difference in the dates of application of IFRS 9 Financial Instruments and the future IFRS 17 Insurance Contracts. In particular the temporary exemption from IFRS 9 is extended until 2023 in order to align the date of application of IFRS 9 with that of the new IFRS 17. The Amendments must be applied for reporting periods beginning on or after 1 January 2021. Earlier application is permitted.

Borussia Dortmund currently does not expect any material impact on the consolidated financial statements.

Amendments to IFRS 9, IAS 39 and IFRS 7, IFRS 4 and IFRS 16 – Interest Rate Benchmark Reform – Phase 2

The Amendments in Phase 2 of the IBOR reform project (Amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4 Insurance Contracts and IFRS 16 Leases) supplement the rules set out in Phase 1 and address issues that might affect financial reporting when an existing interest rate benchmark is actually replaced.

The following aspects are affected in particular with respect to the presentation of financial instruments:

In the event of changes in contractual cash flows, it may not be necessary to adjust or derecognise the carrying amount of financial instruments on the basis of the adjustments. Rather, under certain conditions, the option is available to adjust the effective interest rate to reflect the change in the alternative benchmark interest rate.

With regard to hedge accounting, based on the amendments, it is not necessary under certain circumstances to terminate a hedging relationship designated for hedge accounting purposes due to adjustments triggered by the IBOR reform.

New risks arising from the reform and, in addition, how the transition to alternative reference rates will be handled must be disclosed.

In addition to amendments to IFRS 9, IAS 39 and IFRS 7, the IASB adopted minor amendments to IFRS 4 and IFRS 16.

The Amendments must be applied for reporting periods beginning on or after 1 January 2021.

Borussia Dortmund currently does not expect any material impact on the consolidated financial statements.

Accounting standards issued by the IASB, but not yet adopted by the EU and not yet applied by the Company: