19 Additional Financial Instrument Disclosures

 

 

 

 

Amounts recognized in balance sheet in accordance with IFRS 9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Measurement categories and classes:

 

Carrying amounts
June 30, 2018

 

Amortized cost

 

Fair value affecting net income

 

Fair value recognized in equity with reclassi­fication

 

Fair value recognized in equity without reclassi­fication

 

Amounts recognized in balance sheet in acc. with IAS 17/IAS 28

 

Fair value
June 30, 2018

 

Fair value hierarchy level

in € million

               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash on hand and deposits at banking institutions

 

865.8

 

865.8

 

 

 

 

 

 

 

 

 

865.8

 

1

Trade receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables from the sale of properties

 

239.8

 

239.8

 

 

 

 

 

 

 

 

 

239.8

 

2

Receivables from property letting

 

45.3

 

45.3

 

 

 

 

 

 

 

 

 

45.3

 

2

Other receivables from trading

 

4.5

 

4.5

 

 

 

 

 

 

 

 

 

4.5

 

2

Receivables from sale of real estate inventories (Development)

 

151.4

 

151.4

 

 

 

 

 

 

 

 

 

151.4

 

2

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Joint ventures valued at equity

 

15.7

 

 

 

 

 

 

 

 

 

15.7

 

15.7

 

n.a.

Loans to other investments

 

33.4

 

33.4

 

 

 

 

 

 

 

 

 

51.1

 

2

Other non-current loans

 

20.0

 

20.0

 

 

 

 

 

 

 

 

 

20.1

 

2

Dividends from other investments

 

13.5

 

13.5

 

 

 

 

 

 

 

 

 

13.5

 

2

Non-current securities

 

3.8

 

 

 

 

 

 

 

3.8

 

 

 

3.8

 

1

Other investments

 

728.1

 

 

 

 

 

 

 

728.1

 

 

 

728.1

 

2

Derivative financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow hedges (cross currency swaps)

 

8.1

 

 

 

-11.3

 

19.4

 

 

 

 

 

8.1

 

2

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

 

208.4

 

208.4

 

 

 

 

 

 

 

 

 

208.4

 

2

Non-derivative financial liabilities

 

19,774.6

 

19,774.6

 

 

 

 

 

 

 

 

 

20,349.0

 

2

Derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

359.1

 

 

 

359.1

 

 

 

 

 

 

 

359.1

 

3

Stand-alone interest rate swaps

 

55.2

 

 

 

55.2

 

 

 

 

 

 

 

55.2

 

2

Other swaps

 

16.7

 

 

 

1.2

 

15.5

 

 

 

 

 

16.7

 

2

Liabilities from finance leases

 

99.3

 

 

 

 

 

 

 

 

 

99.3

 

200.0

 

2

Liabilities to non-controlling interests

 

38.4

 

38.4

 

 

 

 

 

 

 

 

 

38.4

 

2

 

 

 

 

 

 

Amounts recognized in balance sheet in accordance with IFRS 9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Measurement categories and classes:

 

Measurement category in acc. with IAS 39

 

Carrying amounts
Dec. 31, 2017

 

Amortized cost

 

Fair value affecting net income

 

Fair value recognized in equity with reclassi­fication

 

Fair value recognized in equity without reclassi­fication

 

Amounts recognized in balance sheet in acc. with IAS 17/IAS 28

 

Fair value
Dec. 31, 2017

 

Fair value hierarchy level

in € million

                 

Loans and Receivables LaR

Available-for-Sale financial assets AfS

Financial Liabilities Held-for-Trading FLHfT

Financial Liabilities measured at Amortized Cost FLAC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash on hand and deposits at banking institutions

 

LaR

 

266.2

 

266.2

 

 

 

 

 

 

 

 

 

266.2

 

1

Trade receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables from the sale of properties

 

LaR

 

201.2

 

201.2

 

 

 

 

 

 

 

 

 

201.2

 

2

Receivables from property letting

 

LaR

 

32.2

 

32.2

 

 

 

 

 

 

 

 

 

32.2

 

2

Other receivables from trading

 

LaR

 

1.5

 

1.5

 

 

 

 

 

 

 

 

 

1.5

 

2

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Joint ventures valued at equity

 

n.a.

 

7.0

 

 

 

 

 

 

 

 

 

7.0

 

7.0

 

n.a.

Loans to other investments

 

LaR

 

33.4

 

33.4

 

 

 

 

 

 

 

 

 

54.0

 

2

Other non-current loans

 

LaR

 

4.3

 

4.3

 

 

 

 

 

 

 

 

 

4.3

 

2

Non-current securities

 

AfS

 

3.6

 

 

 

 

 

 

 

3.6

 

 

 

3.6

 

1

Other investments

 

AfS

 

644.7

 

 

 

 

 

 

 

644.7

 

 

 

644.7

 

2

Derivative financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow hedges (cross currency swaps)

 

n.a.

 

5.5

 

 

 

-11.3

 

16.8

 

 

 

 

 

5.5

 

2

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

 

FLAC

 

133.1

 

133.1

 

 

 

 

 

 

 

 

 

133.1

 

2

Non-derivative financial liabilities

 

FLAC

 

14,060.5

 

14,060.5

 

 

 

 

 

 

 

 

 

14,713.7

 

2

Derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

FLHfT

 

4.2

 

 

 

4.2

 

 

 

 

 

 

 

4.2

 

3

Other swaps

 

n.a.

 

8.9

 

 

 

-1.7

 

10.6

 

 

 

 

 

8.9

 

2

Liabilities from finance leases

 

n.a.

 

99.3

 

 

 

 

 

 

 

 

 

99.3

 

203.5

 

2

Liabilities to non-controlling interests

 

FLAC

 

33.9

 

33.9

 

 

 

 

 

 

 

 

 

33.9

 

2

The section below provides information on the financial assets and financial liabilities not covered by IFRS 9:

  • Employee benefits in accordance with IAS 19: gross presentation of right to reimbursement arising from transferred pension obligations in the amount of € 5.0 million (Dec. 31, 2017: € 5.3 million).
  • Amount by which the fair value of plan assets exceeds the corresponding obligation: € 0.6 million (Dec. 31, 2017: € 1.1 million).
  • Provisions for pensions and similar obligations: € 516.0 million (Dec. 31, 2017: € 513.7 million).

The following table shows the assets and liabilities that are recognized in the balance sheet at fair value and their classification according to the fair value hierarchy:

in € million

 

June 30, 2018

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Investment properties

 

40,992.2

 

 

 

 

 

40,992.2

Financial assets

 

 

 

 

 

 

 

 

Non-current securities

 

3.8

 

3.8

 

 

 

 

Other investments

 

728.1

 

696.4

 

31.7

 

 

Assets held for sale

 

 

 

 

 

 

 

 

Investment properties (contract closed)

 

155.0

 

 

 

155.0

 

 

Derivative financial assets

 

 

 

 

 

 

 

 

Cash flow hedges (cross currency swaps)

 

8.1

 

 

 

8.1

 

 

Liabilities

 

 

 

 

 

 

 

 

Derivative financial liabilities

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

359.1

 

 

 

 

 

359.1

Cash flow hedges

 

16.7

 

 

 

16.7

 

 

Stand-alone derivatives

 

55.2

 

 

 

55.2

 

 

in € million

 

Dec. 31, 2017

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Investment properties

 

33,182.8

 

 

 

 

 

33,182.8

Financial assets

 

 

 

 

 

 

 

 

Non-current securities

 

3.6

 

3.6

 

 

 

 

Other investments

 

644.7

 

613.3

 

31.4

 

 

Assets held for sale

 

 

 

 

 

 

 

 

Investment properties (contract closed)

 

142.6

 

 

 

142.6

 

 

Derivative financial assets

 

 

 

 

 

 

 

 

Cash flow hedges (cross currency swaps)

 

5.5

 

 

 

5.5

 

 

Liabilities

 

 

 

 

 

 

 

 

Derivative financial liabilities

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

4.2

 

 

 

 

 

4.2

Cash flow hedges

 

8.9

 

 

 

8.9

 

 

In general, Vonovia measures its investment properties on the basis of the discounted cash flow (DCF) methodology (Level 3). The material valuation parameters and valuation results can be found in note [13] Investment Properties.

The investment properties classified as assets held for sale are recognized at the time of their transfer to assets held for sale at their new fair value, the agreed purchase price (Level 2).

No financial instruments were reclassified to different hierarchy levels as against the comparative period.

Non-current securities are measured using the quoted prices in active markets (Level 1).

For the measurement of financial instruments, cash flows are initially calculated and then discounted. In addition to the tenor-specific EURIBOR rates (3M; 6M), the respective credit risk is taken as a basis for discounting. Depending on the expected cash flows, either Vonovia’s own credit risk or the counterparty risk is taken into account in the calculation.

For the consolidated financial statements, Vonovia’s own credit risk was relevant for interest rate swaps. This credit risk is derived for material risks from rates observable in the capital markets and ranges of between 15 and 135 basis points, depending on the residual maturities of financial instruments. Regarding the positive market values of the cross currency swaps, a counterparty risk of 60 basis points was taken into account.

The calculated cash flows of the cross currency swap result from the forward curve for USD/EUR. The cash flows are discounted on the basis of the reference interest rate of each currency (LIBOR and EURIBOR) and translated into euros at the current exchange rate (Level 2).

The fair value of the purchase price liabilities from put options/rights to reimbursement granted to minority shareholders is generally based on the going concern value of the respective company; if a contractually agreed minimum purchase price is higher than this amount, this purchase price is recognized (Level 3). The unobservable valuation parameters may fluctuate depending on the going concern values of these companies. However, a major change in value is not likely, as the business model is very predictable.

The following table shows the development of the put options recognized at fair value:

 

 

 

 

Change in

 

Change

 

 

in € million

 

As of Jan. 1

 

Scope of consolidation

 

affecting net income

 

Cash effectiv

 

not affecting net income

 

As of June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

4.2

 

356.2

 

-1.3

 

 

 

359.1

 

 

 

 

Change in

 

Change

 

 

in € million

 

As of Jan. 1

 

Scope of consolidation

 

affecting net income

 

Cash effectiv

 

not affecting net income

 

As of Dec. 31

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

57.2

 

10.1

 

-13.9

 

-1.3

 

-47.9

 

4.2

The addition relating to the change in the scope of consolidation relates to the acquisitions of BUWOG and Victoria Park.

As part of the first-time consolidation of BUWOG, binding share purchase offers to minority shareholders have been assumed in the amount of € 35.2 million.

The other purchase price liabilities from put options of € 321.0 million relate to transactions linked to the share purchase of Victoria Park. In the context of the extended acceptance deadline, the outstanding shareholders are granted the right to tender their shares up until July 3, 2018.

For further information, we refer to note [2] Business Combinations and note [22] Subsequent Events.