2 Accounting and valuation policies

The annual financial statements of the entities included in the consolidated financial statements are prepared in accordance with the accounting and valuation policies of the Carl Zeiss Meditec Group. Adjustments are made as necessary where the local GAAP financial statements of individual entities diverge from these policies. Interim financial statements are used for subsidiaries with a balance sheet date (end of reporting period) different from the balance sheet date of the consolidated financial statements.

New and revised reporting standards

The following financial reporting standards were to be adopted for the first time in the reporting period:

Application of the new and revised reporting standards (including Agenda Decisions) had no material effects on the presentation of the net assets, financial position and results of operations.

The other accounting and valuation policies used were the same as in the prior year.

The IASB and the IFRS Interpretations Committee have issued a number of revised and new standards or interpretations, which did not come into effect in the reporting period. The new or revised standards presented in the table below have not been applied early in the present consolidated financial statements of Carl Zeiss Meditec AG and, aside from IFRS 18 and according to current estimates, will have no material effects on the net assets, financial position and results of operations of the Carl Zeiss Meditec Group. These standards shall be applied when they become mandatory.

IFRS 18 Presentation and Disclosure in Financial Statements includes relevant requirements and replaces IAS 1 Presentation of Financial Statements. In particular, IFRS 18 requires the presentation of certain categories and additional subtotals in the income statement, disclosures in the notes on earnings-oriented company-specific performance indicators and introduces new guidelines for grouping information. Furthermore, numerous disclosure options are no longer available in the cash flow statement. The standard will not affect recognition or measurement in the financial statements, but a new income statement structure may affect what a company reports as operating profit or loss. In the current fiscal year, ZEISS has launched an implementation project to examine and evaluate the effects on the consolidated financial statements, in particular with regard to the structure of the income statement, the cash flow statement and the additional disclosure requirements for individual performance indicators.

Consolidation principles

The consolidated financial statements are based on the annual financial statements as of 30 September 2025 of the subsidiaries included in the consolidated financial statements, which are prepared in accordance with uniform accounting and valuation principles.

Capital consolidation is effected using the purchase method in accordance with IFRS 3 Business Combinations. In the initial measurement, the identifiable assets and liabilities are measured at their fair values at the time of acquisition. The cost of the interests acquired is offset against the Group’s proportionate share in the subsidiary’s equity measured at fair value.

The figures for the acquired subsidiaries are incorporated in the consolidated income statement according to their affiliation to the Group, i.e., from their effective acquisition date (possibility to control).

A subsidiary is deconsolidated on the date on which Carl Zeiss Meditec loses control over the entity.

Third-party equity interests are recorded in the consolidated financial statements as part of consolidated equity under the item “Non-controlling interests”.

Intercompany receivables and liabilities between consolidated entities are netted.

Intercompany profits from intercompany trade are eliminated.

The income tax implications are considered in the course of consolidation by recognizing deferred taxes.

Internal revenue and other intercompany income are offset against the corresponding expenses in the consolidated income statement.

Significant entities where the Group is able, directly or indirectly, to significantly influence financial and operating policy decisions (associates), or directly or indirectly shares control (joint ventures), are accounted for using the equity method. Associates and joint ventures that are immaterial are generally carried at cost.

When using the equity method in accordance with IAS 28 Investments in Associates and Joint Ventures, the shares are initially recognized at cost in the statement of financial position and subsequently measured at amortized cost to reflect changes in the Group’s share of the equity (net assets) after the acquisition date and impairment losses.

Currency translation

The consolidated financial statements are prepared in euro, as the majority of the Group’s transactions are executed in this currency, and because the euro is the functional currency of Carl Zeiss Meditec AG. Unless otherwise specified, all amounts are stated in thousands of euros (€k). Figures are rounded according to proper commercial standards. This may result in rounding differences.

In the financial statements of those entities included in consolidation, transactions in foreign currencies are translated at the relevant exchange rate prevailing on the date of the transaction. Monetary items in foreign currencies are revalued at the mean closing rate, with exchange rate gains and losses being recognized through profit or loss in the consolidated income statement under financial result.

The financial statements of the consolidated subsidiaries prepared in foreign currency are translated based on the functional currency concept pursuant to IAS 21 The Effects of Changes in Foreign Exchange Rates. The assets and liabilities of those foreign subsidiaries whose functional currency is not the euro, but, rather, the local currency of the respective subsidiary, are translated using the current rate method. Equity transactions are translated at historic rates of exchange at the transaction date. The items in the income statement, on the other hand, are converted at the average exchange rate for the fiscal year. Any exchange differences arising are recognized through other comprehensive income within other reserves from currency translation. In hyperinflationary economies, currency translation is always at the respective closing rate.

The functional currency of Carl Zeiss Meditec Medikal Çözümler Tic. ve San. A.Ş., Istanbul, Turkey, which is included in the consolidated financial statements, is considered to be hyperinflationary as defined in IAS 29 Financial Reporting in Hyperinflationary Economies and accounting is prepared according to IAS 29. The price indices published by the Turkish Statistical Institute were used for the indexation of the non-monetary assets and liabilities and the items in the income statement. As of 30 September 2024, the CPI price index was at 2,526 points and increased in the fiscal year under review by 33% to 3,367 points as of 30 September 2025. Gains and losses from the ongoing hyperinflation of non-monetary assets and liabilities and equity in the amount of €-1,621k were recognized in other financial result in the consolidated income statement.

The following key exchange rates for the consolidated financial statements as of 30 September 2025 were used for currency translation:

Use of estimates and discretionary decisions

The preparation of financial statements in accordance with IFRS requires management to make certain estimates, assumptions and discretionary decisions. These can affect the measurement of assets and liabilities, the nature and scope of contingencies, and the reported amounts of income and expenses during the reporting period. The assumptions, estimates and discretionary decisions primarily relate to the following matters:

• the Group-wide determination of uniform useful lives is subject to estimates by management;
• the measurement parameters for impairment testing, in particular regarding goodwill (see Note 11 “Goodwill”);
• the actuarial parameters on which the calculation of the defined benefit obligations is based (see Note 21 “Provisions for pensions and similar obligations”);
• the recoverability of the future tax relief;
• the timing of the capitalization of intangible assets in accordance with IAS 38 Intangible Assets;
• the assessment of the expected probability of default when assessing trade receivables and other financial assets;
• the measurement of lease liabilities in accordance with IFRS 16 Leases. In determining the lease term, in particular, all facts and circumstances that create an economic incentive to exercise options to extend the lease or not exercise termination options are taken into account;
• the share of revenue comprising contractual fees that are in part variable or contingent on future events;
• estimation uncertainties in the measurement of assets and liabilities within the purchase price allocation;
• the adjustment of the carrying amounts and the determination of the price index from hyperinflation;
• the assessment of the method of inclusion of investments in the consolidated financial statements.

In addition, estimates are required when assessing the recoverability of inventories as well as recognizing and measuring provisions and contingent purchase price obligations within the scope of company acquisitions. Actual results may differ from estimates. The estimates and the underlying assumptions are based on empirical values and are reviewed on an ongoing basis. Changes are recognized through profit or loss as and when better information is available.

Current versus non-current classification

In the statement of financial position, assets and liabilities are classified as current or non-current depending on their maturity. Assets and liabilities are generally classified as current if they are expected to fall due within one year. Deferred tax assets and liabilities as well as assets and provisions for pensions and similar obligations are presented as non-current items.