[2] Basis of preparation

The consolidated financial statements of the KION Group for the financial year ended December 31, 2023 have been prepared in accordance with section 315e of the German Commercial Code (HGB) in conjunction with the International Financial Reporting Standards (IFRSs) of the International Accounting Standards Board (IASB) applicable as at the reporting date as well as the associated interpretations (IFRICs) of the IFRS Interpretations Committee (IFRS IC) as adopted by the European Union in accordance with Regulation (EC) No. 1606/2002 of the European Parliament and of the Council concerning the application of international accounting standards. All of the IFRSs and their interpretations that had been enacted by the reporting date and that were required to be applied in the 2023 financial year have been applied in preparing the consolidated financial statements.

In order to improve the clarity of presentation, certain items are aggregated in the statement of financial position and the income statement. The items concerned are disclosed and explained separately in the notes. Assets and liabilities are broken down into current and non-current items. The consolidated income statement is prepared in accordance with the cost of sales (function-of-expense) method.

The consolidated financial statements are prepared in euros, which is the Group’s presentation currency. All amounts are disclosed in millions of euros (€ million) unless stated otherwise. Due to rounding effects, addition of the individual amounts shown may result in minor rounding differences to the totals. The percentages shown are calculated on the basis of the respective amounts, rounded to the nearest thousand euros. All of the separate financial statements of the subsidiaries included in the consolidation were prepared as at the same reporting date as the annual financial statements of KION GROUP AG. The comparative figures for the prior year were determined on the same basis.

Financial reporting standards to be adopted for the first time in the current financial year

The following financial reporting standards were required to be applied for the first time in 2023:

• Amendments to IAS 1 ‘Presentation of Financial Statements’: As a result of the amendments, the requirement to disclose significant accounting policies has been replaced with the requirement to disclose material accounting policies.
• Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’: The amendments provide guidance on distinguishing between changes in accounting policies and changes in accounting estimates.
• Amendments to IAS 12 ‘Income Taxes’: The standard has been amended to restrict the scope of an exemption so that deferred taxes can now be recognized for transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition.
• Amendments to IAS 12 ‘Income Taxes’: The amendments create a temporary, mandatory exception to the obligation to recognize deferred taxes resulting from the introduction of global minimum tax (OECD pillar two rules). In addition, specific disclosures about the extent to which the entity is affected by the minimum tax rules must be included in the notes to the financial statements (further information can be found in note [14]).
• IFRS 17 ‘Insurance Contracts’: The standard establishes the principles for the recognition, measurement, disclosure, and presentation of insurance contracts, superseding the previous standard on this subject, IFRS 4.
• Amendments to IFRS 17 ‘Insurance Contracts’: These amendments relate to the comparative information about financial assets to be presented by an entity that applies IFRS 17 and IFRS 9 for the first time simultaneously.

The initial application of these standards and interpretations has had no significant effect on the presentation of the financial position and financial performance of the KION Group. Furthermore, application of the amendments to IAS 1 has had no impact on the accounting policy disclosures included in the notes to the consolidated financial statements.

Financial reporting standards released but not yet adopted

The standards and interpretations that had been issued by the IASB as at December 31, 2023 but were not yet required to be adopted in 2023 will probably be applied by the subsidiaries in the basis of consolidation, and by KION GROUP AG, only from the time when they are required to be applied. Based on current assessments, the initial application of these financial reporting standards and interpretations will have no significant effect on the presentation of the financial position and financial performance of the KION Group.