The following standards, changes to standards and interpretations are required to be applied on or after January 1, 2006:

Changes to IAS 19: Employee Benefits

These changes introduced the option for an alternative method for recognizing actuarial gains and losses. Deutsche Post World Net has not used this option. At the same time, the changes made additional demands on the accounting for joint plans of multiple employers who do not have sufficient information available to apply accounting for defined benefit plans. Deutsche Post World Net already applied this changed standard in the 2005 fiscal year; hence there are no additional effects on the presentation and scope of the notes disclosures for the 2006 fiscal year. Deutsche Post World Net had already expanded the notes disclosures in the 2005 fiscal year.

Changes to IAS 39: Accounting for Cash Flow Hedges of Forecast Intragroup Transactions

The currency risks of a highly probable intragroup forecast transaction may qualify as the hedged item in the cash flow hedge in consolidated financial statements, provided that (a) the transaction is denominated in a currency other than the functional currency of the entity entering into that transaction and (b) the foreign currency risk will affect the consolidated income statement. There were no effects from these changes for Deutsche Post World Net.

Changes to IAS 39: Fair Value Measurement Option

Deutsche Post World Net applied the fair value option for the first time for the 2006 fiscal year. Under this option, financial assets or financial liabilities may be (voluntarily) measured at fair value through profit and loss if, among other things, this eliminates or significantly reduces an accounting mismatch. The Deutsche Postbank Group applies the fair value option solely on specific loan portfolios that are hedged by interest rate derivatives.

Changes to IAS 39 and IFRS 4: Financial Guarantee Contracts

Financial guarantee contracts issued, which were not previously classified by the entity as insurance contracts, must be initially recognized at fair value and subsequently measured at the greater of (a) the unrecognized balance of the guarantee premiums received and accrued and (b) the amount calculated under IAS 37.

IFRIC 4: Determining whether an Arrangement contains a Lease

IFRIC 4 requires determining whether an arrangement is, or contains, a lease based on the respective economic substance of the arrangement. In so doing, an assessment must be made whether (a) fulfillment of the arrangement is dependent on the use of a specific asset or assets (the asset) and (b) the arrangement conveys a right to use the asset. The following agreements have been examined for a lease in connection with IFRIC 4:

• Service agreements with American air freight companies that handle express business in the USA for Deutsche Post World Net.
• IT agreement with a service provider; additional information can also be found under Note 56.

These determinations resulted in the following effects on the balance sheet and income statement:

Effects of IFRIC 4
€m		2005		2006
Aircraft (finance lease)		164		123
IT hardware (finance lease)		69		47
Liabilities from finance leases		234		173
Depreciation or impairment losses		50		49
Interest expense		9		13
Materials expense		–59		–57

Retrospective application of IFRIC 4 changed income statement and balance sheet items for fiscal year 2005 (see also the tables “Restated consolidated balance sheet” and “Restated income statement” below).

IFRS 7 (Financial Instruments: Disclosures) will be applied for the first time as of fiscal year 2007. IFRS 7 introduces expanded disclosure requirements for improving the provision of information on financial instruments. Both qualitative and quantitative information regarding the extent of risks from financial instruments, including specified minimum disclosures on credit, liquidity and market risks, as well as sensitivity analyses with respect to market risks will be required. The new standard replaces IAS 30 (Disclosures in the Financial Statements of Banks and Similar Financial Institutions), as well as disclosure requirements of IAS 32 (Financial Instruments: Disclosure and Presentation). The amendment to IAS 1 introduces additional disclosure requirements on the amount of capital and its management. Both amendments result in additional disclosure requirements for the Group.

Restatement of the consolidated balance sheet

The purchase price allocation of Exel, a revised presentation of currency translation differences posted directly to equity, as well as the retrospective application of IFRIC 4, caused changes to the balance sheet amounts as of December 31, 2005. In addition, some of the fair values of securitized liabilities were miscalculated in the 2001 consolidated financial statements upon first-time application of IAS 39 for the Deutsche Postbank Group. These were adjusted retroactively in accordance with IAS 8.42 with a €83 million charge to retained earnings and a €42 million charge to the minority interest in retained earnings.

Restated consolidated balance sheet
as of December 31 €m		2005		Adjustments		2005 restated		Notes
ASSETS
Intangible assets		12,749		277		13,026		of which Exel 277
Property, plant, and equipment		9,505		403		9,908		of which Exel 169
Deferred tax assets		883		72		955		of which Exel 72
Receivables and other assets		8,204		–5		8,199		of which Exel –5
EQUITY AND LIABILITIES
Other reserves		2,062		–41		2,021		of which reclassifi-cation CTDs1) –41
Retained earnings		7,452		–42		7,410		of which reclassifi-cation CTDs1) 41 of which Deutsche Postbank Group –83
Minority interest		1,833		–42		1,791		of which Deutsche Postbank Group –42
Provisions for pensions		5,780		–24		5,756		of which Exel –24
Deferred tax liabilities		1,080		358		1,438		of which Exel 358
Other provisions (noncurrent)		2,361		156		2,517		of which Exel 156
Liabilities from financial services		128,568		125		128,693		of which Deutsche Postbank Group 125
Financial liabilities (noncurrent)		4,811		234		5,045		IFRIC 4
Other liabilities (current)		3,832		23		3,855		of which Exel 23

1)	Currency translation differences, further details can be found in Note 37.

Restatement of the income statement

The income statement items for the 2005 fiscal year have changed due to the application of IFRIC 4 as well as by reclassifications between materials expense and other operating expenses.

Restated income statement
January 1 to December 31 €m		2005		Adjustments		2005 restated		Notes
Materials expense		–23,869		101		–23,768		of which IFRIC 4: 59
Depreciation or impairment losses		–1,911		–50		–1,961		of which IFRIC 4: –50
Other operating expenses		–4,407		–42		–4,449		Reclassification
Net other finance costs		–773		–9		–782		of which IFRIC 4: –9