The accounting policies applied by the Lenzing Group in 2021 remained unchanged in comparison with the previous financial year, with the exception of the changes described in this section.
Mandatory changes in accounting policies
The following new and amended standards and interpretations were adopted into EU law and required mandatory application by the Lenzing Group beginning with the 2021 financial year:
Standards/interpretations |
Publication by the IASB |
Mandatory application according to IASB for financial years from |
Adopted by the EU as at 31/12/2021 |
|
|---|---|---|---|---|
IFRS 4 |
Extension of the temporary exemption from applying IFRS 9 in IFRS 4 |
25/06/2020 |
01/01/2021 |
yes |
IFRS 16 |
Extension of practical expedient: Covid-19-Related Rent Concessions |
31/03/2021 |
01/04/2021 |
yes |
IFRS 9, IAS 39, IFRS 7, IFRS 4, IFRS 16 |
IBOR-Reform (Phase 2) |
27/08/2020 |
01/01/2021 |
yes |
The new or amended standards and interpretations applicable as of January 1, 2021 did not result in any significant changes to the consolidated financial statements of the Lenzing Group.
The following new or amended standards and interpretations had been published by the IASB prior to the preparation of these consolidated financial statements, but did not require mandatory application by the Lenzing Group for financial years beginning on or before January 1, 2021:
Standards/interpretations |
Publication by the IASB |
Mandatory application according to IASB for financial years from |
Adopted by the EU as at 31/12/2021 |
|||||
|---|---|---|---|---|---|---|---|---|
IFRS 3 |
References to the Conceptual Framework |
14/05/2020 |
01/01/2022 |
yes |
||||
IFRS 10, IAS 28 |
Sale or contribution of assets between an investor and its associate or joint venture |
11/09/2014 |
unknown1 |
no |
||||
IFRS 14 |
Regulatory Deferral Accounts |
30/01/2014 |
01/01/2016 |
no2 |
||||
IFRS 17 |
Insurance Contracts |
18/05/2017 |
01/01/2023 |
yes |
||||
IFRS 17 |
Initial Application of IFRS 7 and IFRS 9 – Comparative Information |
09/12/2021 |
01/01/2023 |
no |
||||
IAS 1 |
Amendment of classification of liabilities as current or non-current |
23/01/2020 |
01/01/2023 |
no |
||||
IAS 1 |
Disclosure of Accounting Policies |
12/02/2021 |
01/01/2023 |
no |
||||
IAS 8 |
Definition of Accounting Estimates |
12/02/2021 |
01/01/2023 |
no |
||||
IAS 12 |
Deferred Tax related to Assets and Liabilities arising from a Single Transaction |
07/05/2021 |
01/01/2023 |
no |
||||
IAS 16 |
Property, plant and equipment – Proceeds before intended use |
14/05/2020 |
01/01/2022 |
yes |
||||
IAS 37 |
Onerous contracts – Cost of fulfilling a contract |
14/05/2020 |
01/01/2022 |
yes |
||||
Various |
Annual Improvements of IFRSs 2018-2020 |
14/05/2020 |
01/01/2022 |
yes |
||||
|
||||||||
The Lenzing Group applies the practical relief for the accounting of COVID-19-related rent concessions. The change comprises a voluntary practical expedient for leases in which the Lenzing Group is the lessee. For leases to which the practical expedient is applied, this permits the Lenzing Group not to assess whether qualifying rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications. Rent reductions EUR 0 thousand (2020: EUR 58 thousand) were recognized as negative variable lease payments in the consolidated income statement during the 2021 financial year.
The other above-mentioned new or amended standards and interpretations were not adopted prematurely by the Lenzing Group. They are either not relevant for the Group or do not have a material impact on the earnings, assets or liabilities and the cash flows of the Lenzing Group.
The application of these standards and interpretations is generally planned following their endorsement by the EU.
Voluntary changes in accounting policies
Since the beginning of the 2021 financial year, the Lenzing Group has reported its consolidated income statement applying the cost of sales method. The previous presentation was according to the nature of expense method. The modification in the presentation of the income statement aims to enhance the international comparability of the Lenzing Group’s consolidated income statement. As part of this transition, some amounts previously affecting EBIT/EBITDA were reclassified to the financial result (capitalized borrowing costs for the production of non-current assets amounting to EUR 21,166 thousand in 2021, 2020: EUR 8,429 thousand, net interest from defined benefit plans of EUR minus 1,757 thousand in 2021, 2020: EUR minus 2,144 thousand, and loan commitment fees of EUR minus 2,432 thousand in 2021, 2020: EUR minus 2,033 thousand). All amounts were adjusted retrospectively. The Lenzing Group’s performance continues to be measured by EBITDA (earnings before interest, tax, depreciation on property, plant and equipment and right-of-use assets and amortization of intangible assets and before income from the release of investment grants) (see note 4 for reconciliation). The following table shows the reconciliation from the nature of expense method to the cost of sales method:
2021 |
Consolidated Income Statement – Cost of goods sold method |
Revenue |
Change in inventories of finished goods and work in progress |
Own work capitalized |
Other operating income |
Gains or losses from the fair value measurement of biological assets |
Cost of material and other purchased services |
Personnel expenses |
Other operating expenses |
Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets |
Income from the release of investment grants |
Earnings before interest and tax (EBIT) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidated Income Statement – Nature of expense method |
|
2,194,624 |
54,587 |
56,938 |
78,026 |
2,258 |
(1,203,153) |
(452,617) |
(367,721) |
(164,269) |
1,944 |
200,615 |
Revenue |
2,194,624 |
2,194,624 |
|
|
|
|
|
|
|
|
|
|
Cost of sales |
(1,692,760) |
|
54,587 |
56,938 |
|
2,258 |
(1,198,921) |
(329,344) |
(128,984) |
(151,118) |
1,825 |
|
Gross profit |
501,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income |
78,026 |
|
|
|
78,026 |
|
|
|
|
|
|
|
Selling expenses |
(233,981) |
|
|
|
|
|
(1,575) |
(41,619) |
(186,684) |
(4,103) |
|
|
Administrative expenses |
(117,547) |
|
|
|
|
|
(1,333) |
(68,632) |
(39,592) |
(8,100) |
112 |
|
Research and development expenses |
(23,993) |
|
|
|
|
|
(1,324) |
(13,021) |
(8,707) |
(948) |
7 |
|
Other operating expenses |
(3,753) |
|
|
|
|
|
|
|
(3,753) |
|
|
|
Earnings before interest and tax (EBIT) |
200,615 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Consolidated Income Statement – Cost of goods sold method |
Revenue |
Change in inventories of finished goods and work in progress |
Own work capitalized |
Other operating income |
Gains or losses from the fair value measurement of biological assets |
Cost of material and other purchased services |
Personnel expenses |
Other operating expenses |
Amortization of intangible assets and depreciation of property, plant and equipment and right-of-use assets |
Income from the release of investment grants |
Earnings before interest and tax (EBIT) |
||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Consolidated Income Statement – Nature of expense method |
|
1,632,607 |
(41,299) |
52,0801 |
59,1451 |
(10,334) |
(898,392) |
(353,609)1 |
(247,872)1 |
(160,448) |
1,979 |
33,858 |
||
Revenue |
1,632,607 |
1,632,607 |
|
|
|
|
|
|
|
|
|
|
||
Cost of sales |
(1,386,412) |
|
(41,299) |
52,080 |
|
(10,334) |
(870,705) |
(255,046) |
(114,701) |
(148,232) |
1,825 |
|
||
Gross profit |
246,195 |
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Other operating income |
59,145 |
|
|
|
59,145 |
|
|
|
|
|
|
|
||
Selling expenses |
(156,932) |
|
|
|
|
|
(1,249) |
(32,717) |
(119,300) |
(3,721) |
55 |
|
||
Administrative expenses |
(88,236) |
|
|
|
|
|
(25,847) |
(57,904) |
3,224 |
(7,808) |
99 |
|
||
Research and development expenses |
(16,181) |
|
|
|
|
|
(455) |
(7,942) |
(7,098) |
(687) |
|
|
||
Other operating expenses |
(10,133) |
|
|
|
|
|
(136) |
|
(9,997) |
|
|
|
||
Earnings before interest and tax (EBIT) |
33,858 |
|
|
|
|
|
|
|
|
|
|
|
||
|
||||||||||||||
In the 2020 financial year, a voluntary modification was implemented regarding the presentation of accrued liabilities. Accrued liabilities were presented within provisions until the 2020 financial year. In the course of the annual analysis to optimize presentation, the Lenzing Group identified that the liability character of this type of debt predominates. In accordance with IAS 1.41, current accruals of EUR 48,925 thousand (December 31, 2019: EUR 73,016 thousand; January 1, 2019: EUR 94,072 thousand) were therefore reclassified from current provisions to other current liabilities and non-current accruals of EUR 1,523 thousand (December 31, 2019: EUR 538 thousand; January 1, 2019: EUR 1,109 thousand) were reclassified from non-current provisions to other non-current liabilities. The total amount of liabilities consequently remains unchanged.