2.Change of accounting methods

2.1.Standards and interpretations applied or amended and adopted by the EU for the first time

Newly applicable amended standards and interpretations adopted by the EU that take effect on 1 January 2018 or later:

• IFRS 9 (Financial Instruments)
• IFRS 15 (Revenue from Contracts with Customers)
• IFRS 2 (Amendments: Classification and Measurement of Share-based Payment Transactions)
• IAS 40 (Amendments: Transfer of Investment Property)
• IFRS 4 (Amendments: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts)
• Annual Improvements to IFRS Standards 2014-2016 Cycle (Amendments to IFRS 1 and IAS 28)
• IFRIC 22 (Foreign Currency Transactions and Advance Consideration)

IFRS 9 (Financial Instruments)

IFRS 9 (Financial Instruments) will be used (for the first time) in the 2018/19 fiscal year, replacing the existing rules stipulated in IAS 39 (Financial Instruments: Recognition and Measurement). The option to provisionally maintain the guidelines of IAS 39 for the accounting of hedging transactions is not exercised. IFRS 9 is applied prospectively, where applicable.

Other investments classified as AFS (at cost) under IAS 39 (carrying amount as of 30 September 2018: EUR 8,534.4 thousand) will now be classified as FVOCI. As of 1 October 2018, this resulted in an upward revaluation of EUR 4,702.0 thousand.

Securities that were classified as AFS under IAS 39 (carrying amount as of 30 September 2018: EUR 17,972.8 thousand) will now be allocated to the FVOCI category (equity instruments) in the amount of EUR 14,892.1 thousand and to the FVPL category (debt instruments) in the amount of EUR 3,080.7 thousand.

The financial assets in the LaR category were classified as “measured at amortised costs” (AC) in accordance with IFRS 9. A loss allowance is recognised for expected credit losses. If the credit risk has not increased significantly since the initial recognition, an allowance in the amount of the credit losses expected over a period of 12 months will be recognised. An allowance for accounts receivables is, differently to what was explained above, recognised in the amount of the credit losses expected over the full term. If the credit risk has increased significantly since the initial recognition, the allowance amount will correspond to the amount of credit losses expected over the full term. The expected credit risk is determined on the basis of historical information about payment defaults, or on the basis of credit loss probabilities determined internally or procured from external financial service providers.

Recognition of impairments for these financial assets on 1 October 2018 has resulted in a reduction of the carrying amounts for loans to companies in which a participating interest is held (EUR -120.5 thousand), other lendings (EUR -23.2 thousand), accounts receivables (EUR -266.7 thousand) and fixed term deposits (EUR -242.2 thousand).

The following table shows the previous measurement category and carrying amount determined in accordance with IAS 39, as well as the new measurement category and carrying amount determined in accordance with IFRS 9 at the time of the initial application of IFRS 9:

In accordance with IFRS 9, financial instruments that were classified as AtFVP&L (FV option) on 30 September 2018 will have to be classified as FVPL.

IFRS 15 (Revenue from Contracts with Customers)

We refer to the Consolidated Financial Statements as of 30 September 2018 for an analysis of the effects of IFRS 15 on the Consolidated Financial Statements. Application of IFRS 15 does not result in any significant effects on the Consolidated Financial Statements. The initial application of IFRS 15 will require additional disclosures to be made in the Notes to the Consolidated Financial Statements as of 30 September 2019.

Other changes

The other changes to standards and interpretations are without any significant effects on the Consolidated Financial Statements.

2.2.Standards and interpretations that have not been applied early

In the 2018/2019 Semi-Annual Financial Statements, the following amendments adopted by the EU were not applied ahead of their effective date:

Entry into force in the EU on 1 January 2019:

• IFRS 16 (Leases)
• IFRS 9 (Amendments: Prepayment Features with Negative Compensations)
• IFRIC 23 (Uncertainty over Income Tax Treatments)

The following standards and interpretations, amendments and improvements of standards enter into force on 1 January 2018 or a later date, although they have not yet been adopted by the European Union at this time:

• Amendments References to the Conceptual Framework in IFRS Standards
• IFRS 3 (Amendments: Definition of business plan)
• IAS 1 (Amendments), IAS 8 (Amendments: Definition of material)
• IFRS 17 (Insurance Contracts)

These standards are expected to be applied on the effective date promulgated by the EU.

Entry into force on 1 January 2016, but adoption by the European Union postponed for an indefinite time:

• IFRS 10 and IAS 28 (Amendments: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture)
• IFRS 14 (Regulatory Deferral Accounts)

IFRS 16 (Leases)

IFRS 16 was published in January 2016 and replaces IAS 17, IFRIC 4, SIC-15 and SIC-27. The new standard provides that in future all leases and the contractual rights and obligations associated with them must be reported on the lessee's statement of financial position. This resolves the current differences in the recognition of operating and finance leases under IAS 17. The lessee will recognise a right-of-use asset representing its right to use an underlying asset and, at the same time, a lease liability in the amount of the present value of the lease payments. The right of use asset must then be amortised and the lease liability carried forward using the effective interest method. There are exemptions possible for short-term leases and leased properties of low value.

An IT solution to support the calculation is currently being implemented. The relevant contracts will be analysed with regard to accounting in accordance with IFRS 16 and captured in the calculation tool.

The most important change concerns the Group's head office in Linz, which is currently used on the basis of an operating lease. Under the current conditions, it is expected that a right-of-use asset and a lease liability in the amount of EUR 40.2 million will have to be recognised. In addition, the Waste Management Segment (Austria) comprises portfolio contracts concerning properties which, based on the currently available information, will result in the recognition of a right-of-use asset and a corresponding liability in the amount of EUR 17.4 million. From today's perspective, the remaining leases are of subordinate importance, both individually as well as in their entirety.

Current finance leases will be continued; the assets will merely be reclassified as right-of-use assets. This predominantly relates to assets in the Waste Management Segment, which were sold in the 2007/2008 fiscal year and leased back for a term of 15 years (“sale and leaseback”). The carrying amount of these assets was EUR 22.3 million as of 30 September 2018.

IFRS 16 is not applied to short-term leases and leases concerning an underlying asset of minor value. In accordance with IFRS 16.4, the company has opted out of voluntary application of IFRS 16 for intangible assets. Application takes place with retrospective effect by recognising the accumulated effect at the time of initial application. The initial application will take place in the fiscal year 2019/2020.