2.1 Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Section 2:362(9) of the Dutch Civil Code. The consolidated financial statements have also been prepared on a historical cost basis, unless otherwise stated in the respective note or Note 3 Significant accounting policies.
2.2 Functional currency
These consolidated financial statements are presented in euro, which is the Company’s functional currency. All tables and amounts are in thousands of euros unless otherwise stated. In addition, all amounts have been rounded to the nearest thousand, unless otherwise indicated.
2.3 Use of estimates and judgements
The preparation of financial statements in conformity with EU-IFRS requires the Board of Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported values of assets and liabilities, income and expenses. The estimates and associated assumptions are based on past experience and various other factors considered reasonable in the circumstances.
The estimates and underlying assumptions are assessed periodically. Any revised estimates are accounted for in the period in which they are revised, if such revision only affects that period, or the period in which the revision is made and future periods, if the revision has implications for both the period under consideration and future periods.
Judgements
Information about judgements as at 30 September 2023 that has a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is included in the following notes:
Note 22 Provision for claims/legal proceedings (key judgement relates to the possibility of receiving a claim).
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties as at 30 September 2023 that has a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the next financial year is included in the following notes:
Note 5 and 17 Measurement of unbilled services and trade receivables: in the measurement of ECL allowance for trade receivables and contract assets, key assumptions relate to the determination of the weighted-average loss rate;
Note 22 Provision for claims/legal proceedings (in the recognition and measurement of provisions and contingencies, key assumptions relate to the likelihood and magnitude of an outflow of resources).
Other areas that require management to make judgements, estimates and assumptions relate to deferred tax assets (assumptions include the availability of future taxable profit against which deductible temporary difference and tax losses carried forward can be utilized), intangible assets (in the impairment test of intangible assets and goodwill, key assumptions are included relating to underlying recoverable amounts, including the recoverability of development costs), lease liabilities due to the use of Incremental borrowing rates to discount the future payments and financial instruments (key assumptions relate to the measurement of fair values as described below).
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
Management regularly reviews the Group’s significant unobservable inputs and valuation adjustments. If third-party information, such as broker quotes or pricing services, is used to measure fair values, then management assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified.
When measuring the fair value of an asset or a liability, management uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
Management recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in Note 24 Financial instruments and associated risks.
2.4 Going concern
The financial statements have been prepared on a going concern basis.
2.5 Application of Section 402, Book 2 of the Dutch Civil Code
The financial information of the Company is included in the consolidated financial statements. For this reason, in accordance with Section 402, Book 2 of the Dutch Civil Code, the separate profit and loss account of the Company exclusively states the share of the result of participating interests after tax and the other income and expenses after tax.
For an appropriate interpretation of these statutory financial statements, the consolidated financial statements of the Company should be read in conjunction with the separate financial statements, as included.
2.6 Changes in IFRS and other accounting policies/Accounting policies adopted for the preparation of the consolidated financial statements
The Group has adopted the following new standards, interpretations and/or amendments to a standard with a date of initial application of 1 October 2022 unless otherwise stated:
Amendments to IFRS 3, IAS 16, IAS 37 and annual improvements 2018-2020. The amendments in IAS 37 specify which costs an entity includes in determining the cost of fulfilling a contract for the purpose of assessing whether the contract is onerous. At the date of initial application, the cumulative effect of applying the amendments is recognized as an opening balance adjustment to retained earnings or other components of equity, as appropriate. The comparatives are not restated.
Except for the changes in IAS 37, the implementation of the above-mentioned amendments did not have an effect on profit or equity. A number of other changes to IFRSs are not applicable to the Group. The nature and effect of the changes in IAS 37 are explained below.
The Group has adopted Onerous Contracts – Costs of Fulfilling a Contract (Amendments to IAS 37) from 1 October 2022. This resulted in a change in the accounting policy for performing an onerous contracts assessment. Previously, the Group included only incremental costs to fulfil a contract when determining whether that contract was onerous. The revised policy is to include both incremental costs and an allocation of other direct costs. The amendments apply prospectively to contracts existing at the date when the amendments are first applied. The Group has analyzed all contracts existing at 1 October 2022 and determined the contracts that are onerous, applying the revised accounting policy.
At the date of initial application, the cumulative effect of applying the amendments amounting to EUR 628 is recognized as an opening balance adjustment to retained earnings.