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IFRS 15 – Implications on SAP’s 2018 Financials

Statement | January 29, 2018 by SAP News

As of January 1, 2018, SAP changed several of its accounting policies to adopt IFRS 15 ‘Revenue from Contracts with Customers.’ Under the IFRS 15 adoption method chosen by SAP, prior years are not restated to conform to the new policies. Consequently, the year-over-year growth of revenue and profit in 2018 will be impacted by the new policies.

The Company expects the impact of the policy change* on revenue, operating expenses and profit to be as follows:

  • Revenues are expected to experience a benefit of substantially less than €0.1 billion with most of the difference resulting from exercises of customer software purchase options granted in prior years which result in software revenue.
  • Operating expenses are expected to benefit, in cost of sales and marketing, in the amount of approximately €0.2 billion from higher capitalization of sales commissions. Other policy changes will weigh on operating expenses with an additional cost of revenue of substantially less than €0.1 billion.
  • The above-mentioned effects will result in a net positive impact on operating profit of approximately €0.2 billion.

For more details on the implications of IFRS 15 SAP’s 2018 financials please refer to the video with Christoph Huetten, SAP’s Chief Accounting Officer.

SAP will announce its 2018 outlook together with the preliminary Q4 and full year 2017 results on January 30th before the opening of the Frankfurt Stock Exchange.

*“Impact of the accounting policy change” means the difference between a revenue and profit measure determined under SAP’s new IFRS 15-based policies and the respective measure as it would stand had our previous accounting policies continued to apply.

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