The basic assumption of our medium-term corporate planning is still that the travel activity can be resumed in the summer of the financial year 2021. After a further recovery in financial year 2022 it is our unchanged expectation, that the Group's business will reach at the latest in the financial year 2023 the level of the years before the outbreak of the COVID-19-pandemic. In comparison to the assumptions at financial year end 2020 it is now expected that the resumption of the business will happen later in the financial year 2021 and the level of travel activity will be lower especially as there was nearly no business from 1 October 2020 to 31 March 2021.

For information on the calculation of the cost of capital and growth rate, please refer to the section "Goodwill".

The accounting and measurement methods adopted in the preparation of the Interim Financial Statements as at 31 March 2021 are materially consistent with those followed in preparing the annual consolidated financial statements for the financial year ended 30 September 2020, with the exception of the initial application of new or amended standards, as outlined below.

The income taxes were recorded based on the best estimate of the weighted average tax rate that is expected for the whole financial year.

Newly applied standards

Since the beginning of financial year 2021, TUI Group has initially applied the following standards and interpretations, amended or newly issued by the IASB and endorsed by the EU, on a mandatory basis: 


New applied standards in financial year 2021 
 
Standard              Applicable   Amendments                                      Impact on financial statements 
                      from 
                                   Materiality is a key concept in preparing 
                                   financial statements according to IFRS. The 
Amendments to IAS 1                amendments refine the definition of 
& IAS 8               1 Jan 2020   'material' and clarify how to apply             No impact. 
Definition of                      materiality. The amendments also align the 
Material                           definition of 'material' and ensure 
                                   consistency in the application of that 
                                   concept across all IFRS Standards. 
                                   The revised Conceptual Framework includes 
Framework                          revised definitions of an asset and a 
Amendments to                      liability, and new guidance on measurement 
References to the     1 Jan 2020   and derecognition, presentation and             No impact. 
Conceptual                         disclosure. References to the Conceptual 
Framework in IFRS                  Framework in existing Standards are updated. 
Standards                          The revised Conceptual Framework is not 
                                   subject to the Endorsement Process. 
                                                                                   The assessment process used to 
Amendments to                      The amendments to IFRS 3 clarify the            determine whether an acquisition of 
                                   definition of a business and make it easier     a subsidiary falls into the scope of 
IFRS 3                1 Jan 2020   for entities to determine whether an            IFRS 3 was revised in the period 
Definition of a                    acquisition transaction results in              under review. As a result, 
business                           recognition of a group of assets or a           accounting for acquisitions of hotel 
                                   business.                                       companies, in particular, will now 
                                                                                   be assessed on this revised basis. 
                                   The amendments relate to the provision of 
                                   relief from potential consequences arising 
Amendments to IFRS                 from the reform of interbank offered rates 
9, IAS 39 and IFRS                 (IBORs) such as LIBOR on companies' financial 
7                                  reporting. They are intended to secure the 
Interest Rate         1 Jan 2020   continuation of hedging relationships despite   Not material. 
Benchmark Reform                   the replacement of current interest rates 
(Phase 1)                          with alternative rates. Entities also have to 
                                   disclose the extent to which their hedges are 
                                   affected by the interest rate benchmark 
                                   reform. 
                                   The amendments published by the IASB on 28 
                                   May 2020 provide lessees with an exemption 
Amendments to                      from assessing whether a COVID-19-related 
IFRS 16                            rent concession is a lease modification.        No impact. TUI does not apply the 
COVID-19-Related      1 Jun 2020   Lessees applying the exemption have to          new practical expedient. 
Rent Concessions                   account for the rent concessions as if they 
                                   were not lease modifications. The amendments 
                                   are available for rent concessions reducing 
                                   lease payments due on or before 30 June 2021.

Correction of comparative periods

In the financial year 2020 the functional currency of companies in Turkey changed. Beginning with 1 October 2019 the Euro was determined as functional currency as opposed to the Turkish Lira before.

In the consolidated financial statements for the financial year ending 30 September 2020 the financial figures of the affected companies were reported for the first time based on Euro. In the Interim Financial Statements per 31 March 2020 they reported erroneously based on the functional currency Turkish Lira. As the exchange rate of the Turkish Lira in comparison to the Euro changed considerably during the financial year 2020 the comparatives to the income statement, to the earnings per share, to the statement of comprehensive income and to the statement of changes in equity for the period from 1 October 2019 to 31 March 2020 have been corrected accordingly. The restated amounts are presented below. 


Restated items of the unaudited condensed consolidated income statement of TUI Group for the period from 1 Oct 2019 to 
31 Mar 2020 
 
EUR million                                                     before            Change in functional           adjusted 
                                                              adjustment        currency 
Cost of sales                                                 6,970.9           - 11.2                         6,959.7 
Gross loss                                                    - 332.2           11.2                           - 321.0 
Financial expenses                                            150.6             - 20.9                         129.7 
Earnings before income taxes                                  - 881.0           32.1                           - 849.0 
Income taxes                                                  - 35.3            1.3                            - 34.0 
Group loss                                                    - 845.7           30.8                           - 815.0 
Group loss for the year attributable to shareholders of TUI   - 892.2           30.8                           - 861.4 
AG 
Reconciliation to the adjusted earnings per share of the TUI Group for the period from 
1 Oct 2019 to 31 Mar 2020 
 
EUR                                      before adjustment   change in functional currency   adjusted 
Basic and diluted earnings per share   - 1.51              0.05                            - 1.46 
Restated items of the unaudited condensed consolidated statement of comprehensive income of TUI Group for the period 
from 1 Oct 2019 to 31 Mar 2020 
 
EUR million                                              before adjustment    Change in functional currency      adjusted 
Group loss                                             - 845.8              30.8                               - 815.0 
Foreign exchange differences                           - 160.2              38.8                               - 121.4 
Items that may be reclassified to profit or loss       - 503.0              38.8                               - 464.2 
Other comprehensive income                             - 201.1              38.8                               - 162.3 
Total comprehensive income                             - 1,046.9            69.6                               - 977.3 
attributable to shareholders of TUI AG                 - 1,053.6            69.6                               - 984.0

Corresponding to the corrections of amounts in the statement of comprehensive income in the statement of changes equity the revenue reserves increased by EUR69.6m from EUR-3,637.6m to EUR-3,568.0m, the equity before non-controlling interest increased from EUR2,075.7m to EUR2,145.3m and the total equity increased from EUR2,792.3m to EUR2,861.9m.

Group of consolidated companies

The Interim Financial Statements include all material subsidiaries over which TUI AG has control. Control requires TUI AG to have decision-making power over the relevant activities, be exposed to variable returns and have entitlements regarding the returns, or have the ability to affect the level of those variable returns through its decision-making power.

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