Group Report
January 1 to September 30, 2016

ACCOUNTING POLICIES

The entry into force of the German Act Implementing the European Directive amending the Transparency Directive (Gesetz zur Umsetzung der europäischen Transparenzrichtlinie-Änderungsrichtlinie) on November 26, 2015 resulted in the deletion of the legal requirements governing the preparation and publication of quarterly statements and quarterly financial reports that were previously set out in § 37x of the old version of the German Securities Trading Act (WpHG). However, the Frankfurter Wertpapierbörse (Frankfurt stock exchange) still mandates quarterly financial reporting for the companies listed in the Prime Standard, though following the amendment of its exchange rules with effect from November 26, 2015 only in the form of a quarterly statement (§ 51a (1) of the Exchange Rules for the Frankfurter Wertpapierbörse (FWB) as amended). Yet, the obligation to publish a quarterly statement does not apply if the company voluntarily prepares a quarterly financial report in accordance with § 37w WpHG (§ 51a (6) of the FWB Exchange Rules as amended). In accordance with the amended § 51a (6) of the FWB Exchange Rules, Deutsche Telekom AG continues to voluntarily prepare a quarterly financial report that still comprises interim consolidated financial statements and an interim Group management report. The interim consolidated financial statements were prepared in accordance with the International Financial Reporting Standards (IFRSs) applicable to interim financial reporting as adopted by the EU. The interim management report for the Group was prepared in accordance with the WpHG.

Statement of Compliance

The interim consolidated financial statements for the period ended September 30, 2016 have been prepared voluntarily in compliance with International Accounting Standard (IAS) 34. As permitted by IAS 34, it has been decided to publish a condensed version compared to the consolidated financial statements at December 31, 2015. All IFRSs applied by Deutsche Telekom have been adopted by the European Commission for use within the EU.

In the opinion of the Board of Management, the reviewed quarterly financial report includes all standard adjustments to be applied on an ongoing basis that are required to give a true and fair view of the results of operations and financial position of the Group. Please refer to the notes to the consolidated financial statements as of December 31, 2015 for the accounting policies applied for the Group's financial reporting (2015 Annual Report, page 161 et seq.).

Initial application of new standards and interpretations as well as amendments to standards and interpretations in the reporting period relevant for the 2016 financial year
Pronouncement Title To be applied
by
Deutsche Telekom from
Changes Impact on the presentation of
Deutsche Telekom's results
of operations, financial position,
or cash flows
 
Amendments to IAS 1 Disclosure Initiative Jan. 1,
2016
The amendments will allow disclosures
in the financial statements to be
simplified, with a focus on materiality.
No material impact.
Amendments to IAS 16 and IAS 38 Clarification of Acceptable
Methods of Depreciation
and Amortization
Jan. 1,
2016
A revenue-based depreciation
method for property, plant
and equipment is not permissible,
whereas for intangible assets there
is only a refutable assumption
that such a method is not appropriate.
No material impact.
Amendments to IAS 16 and IAS 41 Bearer Plants Jan. 1,
2016
  No relevance for Deutsche Telekom.
Amendments to IAS 19 Defined Benefit Plans –
Employee Contributions
Jan. 1,
2016
By revising IAS 19, the IASB aims
to simplify the accounting for contributions
from employees or third parties
to a defined benefit plan.
The simplified accounting permits such
contributions to be recognized
as a reduction in the current service
cost in the period
in which
the related service is rendered
if the amounts of the contributions
is independent of the number of years
of service.
No material impact.
Amendments to IAS 27 Equity Method in Separate
Financial Statements
Jan. 1,
2016
  No relevance for Deutsche Telekom.
Amendments to
IFRS 10, IFRS 12,
and IAS 28
Investment Entities:
Applying the
Consolidation Exception
Jan. 1,
2016
Investment entities are not covered by IFRS 10
and are therefore exempt from the provisions
on consolidation in this standard.
The consolidation exception was
substantiated in four points.
No material impact.
Amendments to IFRS 11 Accounting for
Acquisitions of
Interests in Joint
Operations
Jan. 1,
2016
When an interest in a joint operation in which
the activity constitutes a business
as defined in IFRS 3, is acquired,
all of the principles on business combinations
accounting in IFRS 3 and other IFRSs
are to be applied, except for those
principles that conflict with the guidance
in IFRS 11.
Since the amendments concern
only future transactions, it is
not possible to make a general statement
on their impact on the presentation of
Deutsche Telekom's results
of operations
or financial position.
Annual Improvements Project Annual Improvements
to IFRSs 2010-2012
Cycle
Jan. 1,
2016
Clarification of many
published standards.
No material impact.
Annual Improvements Project Annual Improvements
to IFRSs 2012–2014
Cycle
Jan. 1,
2016
Clarification of many
published standards.
No material impact.