General Information about Consolidated Financial Statements
The consolidated annual financial statements as well as the combined management report are part of the SAP Integrated Report. There you can find a detailed overview of our group´s consolidated financial statements. Information on changes in our reporting during the fiscal year are listed here, in our half-year report, and in our quarterly statements.
Performance Measures, Non-IFRS Measures, Adjustments and Full-Year Estimates
Non-IFRS measures
We disclose certain financial and non-financial measures. Some of those measures are not prepared in accordance with IFRS and are therefore considered non-IFRS financial measures. They may not correspond to non-IFRS financial measures that other companies report. The non-IFRS financial measures that we report should only be considered in addition to, and not as substitutes for or superior to other measures of financial performance prepared in accordance with IFRS.
We update our estimates for our non-IFRS adjustments on a quarterly basis.
For more information about the performance measures we disclose, their calculation, their usefulness and their limitation, please use the link.
Updated estimates are regularly disclosed in the recent results presentation.
Updated 2024 Financial Reporting – Historical Data Available
As announced in December 2023, SAP is updating its financial reporting as of January 1, 2024. Our reporting will reflect this change starting with Q1 earnings on April 22, 2024
To support financial modeling, SAP is now providing a set of historical results based on the updated logic. Specifically, the dataset includes the:
Quarterly IFRS and non-IFRS income statements for fiscal years 2022 and 2023
Quarterly history of the updated cloud disclosure, including Cloud ERP Suite, Extension Suite and Infrastructure-as-a-Service (IaaS)
Cloud ERP Suite references the portfolio of Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) solutions that are either part of, or very tightly integrated with core ERP, and that are also included in key commercial packages, such as RISE with SAP. The following offerings contribute to Cloud ERP Suite revenue: SAP S/4HANA Cloud, SAP Business Technology Platform, core solutions for HR and payroll, spend management, commerce, customer data solutions, business process transformation, and working capital management.
Extension Suite references SAP’s remaining SaaS and PaaS solutions that supplement and extend the functional coverage of the Cloud ERP Suite.
Infrastructure-as-a-Service (IaaS) references cloud revenue derived from providing hosting and related management services to our customers.
Evolution of SAP’s cloud disclosure
2024 Accounting and Reporting Updates
In December 2023, SAP provided a preview on reporting changes that will be implemented for fiscal year 2024.
While SAP will already base its 2024 financial outlook (due January 2024) on the new logic, the change will not be reflected in our actual reporting until the release of SAP’s Q1 2024 earnings, due April 2024.
In summary, the changes include:
Updated non-IFRS definition
Non-IFRS results to include stock-based compensation
Non-IFRS results to exclude gains/losses from equity investments
Reflection of gains/losses from smaller divestitures in non-operating income/expense, net
Discontinuation of the ‘SAP-triggered financing program’ in 2024
Introduction of Cloud ERP Suite revenue as a new disclosure
Removal of S/4HANA Cloud disclosures and SaaS/PaaS/IaaS cloud gross margin disclosures. SaaS and PaaS reporting will be merged as both individual reportings will be discontinued.
For additional details, please refer to the recorded webcast session and the presentation.
Current Cloud Backlog
Beginning in 2021, SAP expanded its financial disclosure to provide investors with transparency on the transition of its core ERP business to the cloud. The new metric ‘Current Cloud Backlog’ replaces the previously disclosed ‘New Cloud Bookings’.
The Current Cloud Backlog represents the contractually committed cloud revenue SAP expects to recognize over the upcoming 12 months, based on the existing cloud subscription contracts as they are in place as of the reporting date. Its expansion between two reporting dates is an indicator for the net cloud business volume added over that period, considering new business as well as renewed vs. lost business.
The Current Cloud Backlog is a subcomponent of the “Remaining Performance Obligations” metric that is required to be disclosed under the new revenue standards. It is a subcomponent in that it is limited to cloud revenue and only includes the expected revenue of the next 12 months.
For more details on the metric, please refer to the videos and the presentation.
IFRS 16
As of January 1, 2019, SAP changed several of its accounting policies to adopt IFRS 16. See the presentation and the video for more details.
Operating Models
Qualtrics operations classified as ‘discontinued operations’ under IFRS 5
With SAP’s intent to sell Qualtrics, Qualtrics operations classify as ‘discontinued operations’ under IFRS 5.
IFRS 5 has a clear set of rules how to, among others, present revenues, expenses, disposal gain, cashflows, assets and liabilities. To get a preview of how SAP will present Q1 2023 results, please refer to a presentation on the topic by our Chief Accounting Officer, Dr. Christopher Sessar.
Other Reporting Topics
Inline XBRL-Reporting
The European Securities and Markets Authority (ESMA) requires issuers to prepare their annual financial reports in a European Single Electronic Format (ESEF). Since January 1, 2020, issuers must submit their annual financial reports in xHTML, and tag the IFRS annual consolidated financial statements in Inline eXtensible Business Reporting Language (iXBRL) using the ESEF Taxonomy. SAP’s ESEF documents can be accessed on the platforms of the Bundesanzeiger (for 2020 and 2021)/Unternehmensregister (since 2022).
Foreign private issuers (FPIs) that prepare their financial statements in accordance with IFRS must submit their financial statements in (Inline) XBRL using the IFRS Taxonomy with the U.S. Securities and Exchange Commission (SEC) for fiscal periods ending on or after December 15, 2017. SAP’s (Inline) XBRL financial statement filings can be accessed on the EDGAR portal of the U.S. SEC as part of our reporting on Form 20-F.