IFRS adoption in Germany : perspectives and consequences : a case study of Deutsche Telekom AG

2013

Themandatoryadoption of the International Financi al ReportingStandards(IFRS)as basis

for the preparationof consolidatedfinancialstatementsin 2005constituteda major change

in accountingregulationsin Germany.Thisthesisfocuseson gaininga deeperunderstanding

of the consequencesthis changehad on the financial reporting of Germancompanies.For

this reason,the financial reporting basedon the previousGermanaccountingregulations

(GermanGAAP)is comparedto the reporting under IFRSregulations.Thisis doneboth on a

theoretical level and in a casestudy approachbased on one specificcompany,Deutsche

TelekomAG.Theresearchproduceda numberof keyfindings:Thelargestdifferencesin the

financialreporting under the two accountingsystems arisein the recognitionand valuation

of intangible assets,provisionsand deferred taxes, leading to a considerableincreasein

equity in the first yearof IFRSadoption at Deutsche Telekom.In the subsequentyears,the

level of provisions as well as the annual expensesfor depreciation, amortization and

impairmentsremainedsignificantlylower. Themain conclusionsdrawn from this research

are that financial reporting under IFRSis lessconservativethan under GermanGAAPand

there are fewer possibilitiesto smooth earningsvia reserves.Moreover, it is visible that

accountingpracticesadopted under IFRSare influenced by previous national accounting

regulations,howeveronlyto a certaindegree