6.1 Basis of preparation
General information and description of the business
PostNL N.V. (hereafter referred to as ‘the company’) is a public limited liability company with its registered seat and head office at Waldorpstraat 3, 2521 CA, The Hague, the Netherlands. The Chamber of Commerce number is 27124700.
Change of accounting framework
In 2023, PostNL changed the accounting framework in its corporate financial statements from International Financial Reporting Standards as endorsed by the European Union (IFRS-EU) to Part 9 of Book 2 of the Dutch Civil Code, where PostNL makes use of the option in Article 362 (8) to use the same accounting principles on recognition and measurement as applied in the consolidated financial statements.
In 2011, it was expected that the implementation of the revised IAS 19 related to pensions would result in a negative equity per 1 January 2013, which potentially prohibited the payout of (stock) dividend while the Company was generating sufficient cashflows for dividends. Accordingly, the accounting framework for the corporate financial statements was changed to IFRS-EU. As part hereof, the investments in subsidiaries were revalued to their higher deemed cost value, positively impacting corporate equity. With the pension plan amendment to a collective defined contribution plan at the end of December 2022, the Company’s equity is no longer impacted by IAS 19. Given the elimination of this impact, the change back to Part 9 of Book 2 of the Dutch Civil Code is made. With the changed accounting framework, the corporate financial statements reflect the clear relationship between consolidated and corporate equity and results, are in line with other listed Dutch entities and no longer require significant management judgement in the determination of the value of investments in subsidiaries. As such, taking into account the purpose of the corporate financial statements, PostNL concluded that this change provides reliable and more relevant information.
As a result of the change of accounting framework, PostNL’s investment in subsidiaries in the corporate financial statements are accounted for according to the equity method with the principles for the recognition and measurement of assets and liabilities and determination of results as set out in the notes to the consolidated financial statements.
The comparative figures have been adjusted accordingly.
For the principles of valuation of assets and liabilities and for the determination of results reference is made to the notes to the consolidated statement of financial position and consolidated statement of profit or loss.
The value of the corporate investments in subsidiaries based on the former accounting policy (deemed) ‘cost less impairment’ practically resulted in annual substantial movements in the non-distributable revaluation reserve. As of this reporting period, this will no longer be applicable. Applying the former accounting policy in the current year would have required management to assess the fair value of the investments in subsidiaries which possibly would have resulted in an impairment of these investments in subsidiaries and a corresponding reduction of the non-distributable within corporate equity.
As under Dutch GAAP a legal reserve for investments in subsidiaries is applicable, PostNL performed an assessment concluding no earnings restrictions are present that would otherwise require a legal reserve for investments in subsidiaries.
Reconciliation from previous GAAP to Dutch GAAP
The overview below presents the impact of the change in accounting framework from IFRS-EU to Dutch GAAP for shareholders’ equity in the corporate financial statements as per 1 January 2022 (transition date).
PostNL N.V. Reconciliation of total shareholders' equity in € million
| 1 January 2022 | |
|---|---|
| Previous GAAP | 3,151 |
| Effect transition to Dutch GAAP | (2,725) |
| Dutch GAAP | 426 |
As at 1 January 2022, shareholders’ equity is €2,725 million lower compared to previous GAAP due to the effect from the measurement of the investments in subsidiaries. The company applied the equity method and used the same principles of valuation of assets and liabilities for the corporate financial statements as the consolidated financial statements.
The following tables summarise the effect of the change in accounting framework on the corporate (comprehensive) income statement for the full year 2022 and the corporate balance sheet per 1 January 2022 and 31 December 2022.
PostNL N.V. Restatements corporate statement of profit or loss in € million
2022
| Year ended at 31 December | 2022 Reported | Restatements | 2022 Restated |
|---|---|---|---|
| Dividend income | 150 | (150) | 0 |
| Impairment investments in subsidiaries | (1,465) | 1,465 | 0 |
| Salaries, pensions and social security contributions | (1,430) | (1,430) | |
| Other operating expenses | 0 | 0 | |
| Total operating expenses | (2,895) | 1,465 | (1,430) |
| Operating income | (2,745) | 1,315 | (1,430) |
| Net financial expense | (9) | (9) | |
| Share in result from subsidiaries | 75 | 75 | |
| Profit/(loss) before income taxes | (2,754) | 1,390 | (1,364) |
| Income taxes | 371 | 371 | |
| Profit/(loss) for the year attributable to shareholders | (2,383) | 1,390 | (993) |
PostNL N.V. Restatements corporate statement of comprehensive income in € million
2022
| Year ended at 31 December | 2022 Reported | Restatements | 2022 Restated |
|---|---|---|---|
| Profit/(loss) for the year attributable to shareholders | (2,383) | 1,390 | (993) |
| Actuarial gains/(losses) pensions, net of tax | 491 | 491 | |
| Pension asset ceiling/minimum funding requirement, net of tax | 585 | 585 | |
| Share in other comprehensive income from subsidiaries | (7) | (7) | |
| Other comprehensive income that will not be reclassified to the income statement | 1,076 | (7) | 1,069 |
| Share in other comprehensive income from subsidiaries | 2 | 2 | |
| Other comprehensive income that may be reclassified to the income statement | 0 | 2 | 2 |
| Total other comprehensive income for the year | 1,076 | (5) | 1,071 |
| Total comprehensive income for the year | (1,307) | 1,385 | 78 |
PostNL N.V. Restatements corporate statement of financial position in € million
2022
| At 31 December, before appropriation of profit | 1 January 2022 Reported | Restatements | 1 January 2022 Restated | 31 December 2022 Reported | Restatements | 31 December 2022 Restated |
|---|---|---|---|---|---|---|
| Assets | ||||||
| Investments in subsidiaries | 3,526 | (2,725) | 801 | 2,061 | (1,340) | 721 |
| Total non-current assets | 3,526 | (2,725) | 801 | 2,061 | (1,340) | 721 |
| Total current assets | 389 | 0 | 389 | 173 | 0 | 173 |
| Total assets | 3,915 | (2,725) | 1,190 | 2,234 | (1,340) | 893 |
| Equity and liabilities | ||||||
| Issued share capital | 41 | 41 | 39 | 39 | ||
| Additional paid-in capital | 163 | 163 | 163 | 163 | ||
| Legal reserves | 19 | 19 | 13 | 13 | ||
| Revaluation reserve investments in subsidiaries | 2,502 | (2,502) | 1,037 | (1,037) | 0 | |
| Other reserves | (188) | 20 | (167) | 2,711 | (1,444) | 1,267 |
| Retained earnings | 632 | (263) | 370 | (2,433) | 1,127 | (1,306) |
| Total shareholders' equity | 3,151 | (2,725) | 426 | 1,517 | (1,340) | 177 |
| Total non-current liabilities | 762 | 0 | 762 | 699 | 0 | 699 |
| Total current liabilities | 2 | 0 | 2 | 17 | 0 | 17 |
| Total equity and liabilities | 3,915 | (2,725) | 1,190 | 2,234 | (1,340) | 893 |
Accounting policies
Investments in subsidiaries
PostNL’s investment in subsidiaries in the corporate financial statements are accounted for according to the equity method with the principles for the recognition and measurement of assets and liabilities and determination of results as set out in the notes to the consolidated financial statements.
For the principles of valuation of assets and liabilities and for the determination of results reference is made to the notes to the consolidated statement of financial position and consolidated statement of profit or loss.
Share of result of investments in subsidiaries
The share in the result of investments in subsidiaries consists of the share of the Company in the result of these investments in subsidiaries. Results on transactions involving the transfer of assets and liabilities between the Company and its investments in subsidiaries and mutually between investments in subsidiaries themselves, are eliminated to the extent that they can be considered as not realised.
The Company makes use of the option to eliminate intragroup expected credit losses against the book value of loans and receivables from the Company to investments in subsidiaries, instead of elimination against the equity value of the investments in subsidiaries.