41 Additional Financial Instrument Disclosures

 

 

 

 

Amounts recognized in balance sheet in accordance with IFRS 9

 

 

 

 

 

 

 

Measurement categories and classes:

in € million

 

Carrying amounts Dec. 31, 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 Dec. 31, 2018

 

Fair value hierarchy level

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash on hand and deposits at banking institutions

 

547.7

 

547.7

 

 

 

 

 

 

 

 

 

547.7

 

1

 

Trade receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receivables from the sale of properties

 

258.6

 

258.6

 

 

 

 

 

 

 

 

 

258.6

 

2

 

Receivables from property letting

 

44.4

 

44.4

 

 

 

 

 

 

 

 

 

44.4

 

2

 

Other receivables from trading

 

6.4

 

6.4

 

 

 

 

 

 

 

 

 

6.4

 

2

 

Receivables from sale of real estate inventories (Development)

 

183.7

 

183.7

 

 

 

 

 

 

 

 

 

183.7

 

2

 

Financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments valued at equity

 

29.1

 

 

 

 

 

 

 

 

 

29.1

 

29.1

 

n. a.

 

Loans to other investments

 

33.4

 

33.4

 

 

 

 

 

 

 

 

 

48.1

 

2

 

Other non-current loans

 

10.2

 

10.2

 

 

 

 

 

 

 

 

 

15.8

 

2

 

Non-current securities

 

4.0

 

 

 

 

 

 

 

4.0

 

 

 

4.0

 

1

 

Other investments

 

792.1

 

 

 

 

 

 

 

792.1

 

 

 

792.1

 

2

 

Derivative financial assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow hedges (cross currency swaps)

 

16.3

 

 

 

-11.0

 

27.3

 

 

 

 

 

16.3

 

2

 

Stand-alone interest rate swaps and interest rate caps as well as embedded derivatives

 

4.5

 

 

 

4.5

 

 

 

 

 

 

 

4.5

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade payables

 

243.5

 

243.5

 

 

 

 

 

 

 

 

 

243.5

 

2

 

Non-derivative financial liabilities

 

20,136.0

 

20,136.0

 

 

 

 

 

 

 

 

 

20,471.2

 

2

 

Derivative financial liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

36.8

 

 

 

36.8

 

 

 

 

 

 

 

36.8

 

3

 

Stand-alone interest rate swaps and interest rate caps

 

54.6

 

 

 

54.6

 

 

 

 

 

 

 

54.6

 

2

 

Other swaps

 

19.8

 

 

 

-2.6

 

-17.2

 

 

 

 

 

19.8

 

2

 

Liabilities from finance leases

 

99.4

 

 

 

 

 

 

 

 

 

99.4

 

198.0

 

2

 

Liabilities from tenant financing

 

160.8

 

160.8

 

 

 

 

 

 

 

 

 

160.8

 

2

 

Liabilities to non-controlling interests

 

33.2

 

33.2

 

 

 

 

 

 

 

 

 

33.2

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts recognized in balance sheet in accordance with IFRS 9

 

 

 

 

 

 

Measurement categories and classes:

in € million

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments valued at equity

 

n. a.

 

7.0

 

 

 

 

 

 

 

 

 

7.0

 

7.0

 

n. a.

Loans to other investments

 

LaR

 

33.5

 

33.5

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans and Receivables

 

LaR

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-Sale financial assets

 

AfS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities Held-for-Trading

 

FLHfT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Liabilities measured at Amortized Cost

 

FLAC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 € 4.7 million (December 31, 2017: € 5.3 million).
  • Amount by which the of plan assets exceeds the corresponding obligation: € 1.1 million (December 31, 2017: € 1.1 million).
  • Provisions for pensions and similar obligations: € 520.6 million (December 31, 2017: € 513.7 million).

IFRS 13 defines fair value as a price that would be received by selling an asset or paid to transfer a liability in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market. The fair value is to be determined using valuation parameters that are as market-based as possible as inputs. The valuation hierarchy ( hierarchy) categorizes the inputs for the measurement technique in three levels, giving the highest priority level to the most market-based inputs:

Level 1 inputs: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2 inputs: valuation parameters other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 inputs: unobservable valuation parameters for the asset or liability.

When inputs used to measure the fair value are categorized within different levels of the fair value hierarchy, the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is material to the entire measurement.

Should the level of the input parameters used for a financial instrument change in a period subsequent to initial recognition, the financial instrument is reclassified to the new hierarchy level as of the end of that reporting period. No financial instruments were reclassified to different hierarchy levels during the reporting period.

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

 

Dec. 31, 2018

 

Level 1

 

Level 2

 

Level 3

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Investment properties

 

43,490.9

 

 

 

 

 

43,490.9

Financial assets

 

 

 

 

 

 

 

 

Non-current securities

 

4.0

 

4.0

 

 

 

 

Other investments

 

792.1

 

672.8

 

119.3

 

 

Assets held for sale

 

 

 

 

 

 

 

 

Investment properties (contract closed)

 

105.9

 

 

 

105.9

 

 

Derivative financial assets

 

 

 

 

 

 

 

 

Cash flow hedges (cross currency swaps)

 

20.8

 

 

 

20.8

 

 

Liabilities

 

 

 

 

 

 

 

 

Derivative financial liabilities

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

36.8

 

 

 

 

 

36.8

Cash flow hedges

 

19.8

 

 

 

19.8

 

 

Stand-alone derivatives

 

54.6

 

 

 

54.6

 

 

 

 

 

 

 

 

 

 

 

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 [23] “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/STIBOR 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, in principle, was relevant for interest rate swaps. This credit risk is derived for material risks from rates observable on the capital markets and ranges of between 40 and 180 basis points, depending on the residual maturities of financial instruments. Regarding the positive market values of the cross currency swaps, a counterparty risk of 90 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 values of the cash and cash equivalents, trade receivables as well as other financial receivables approximate their carrying amounts at the reporting date owing to their mainly short maturities. The amount of the estimated impairment loss on cash and cash equivalents was calculated based on the losses expected over a period of twelve months. It was determined that the cash and cash equivalents have a low risk of default due to the external ratings and short residual maturities and that there is no need for any material impairment of cash and cash equivalents.

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 effective

 

not affecting net income

 

As of Dec. 31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

4.2

 

35.2

 

-1.1

 

-

 

-1.5

 

36.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

 

57.2

 

10.1

 

-13.9

 

-1.3

 

-47.9

 

4.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The change in the scope of consolidation relates to put options for shares held by minority shareholders as part of the first-time consolidation of BUWOG.

For further information, we refer to note [4] “Scope of Consolidation and Business Combinations.”

The sensitivity analysis has shown that if the value of the company deviates by 10% in each case, the purchase price liability from put options granted as of the reporting date would differ by € +3.7 million or € -3.6 million (Dec. 31, 2017: € +0.4 million or € -0.4 million). The changes would be recognized in full in net interest.

 

 

 

 

 

 

 

 

From subsequent measurement

 

 

 

 

 

 

 

 

 

in € million

 

From interest

 

Income from other non-current loans

 

Dividends from other investments

 

Impairment losses

 

Derecognized receivables

 

Derecognized liabilities

 

Financial result affecting income 2018

 

Measurement cash flow hedges

 

Measurement financial instruments categorized as equity instruments

 

Total financial result 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt instruments carried at (amortized) cost

 

3.5

 

2.2

 

 

21.6

 

18.9

 

 

46.2

 

 

 

 

 

46.2

 

Debt instruments measured at FV through P&L

 

 

 

23.1

 

 

 

 

23.1

 

 

 

 

 

23.1

 

Derivatives measured at FV through P&L with reclassification

 

-29.7

 

 

 

 

 

 

-29.7

 

 

 

 

 

-29.7

 

Debt instruments measured at FVOCI with reclassification

 

 

 

 

 

 

 

 

3.5

 

 

 

3.5

 

Equity instruments measured at FVOCI without reclassification

 

 

 

 

 

 

 

 

 

 

60.0

 

60.0

 

Financial liabilities measured at (amortized) cost

 

-401.4

 

 

 

 

 

0.9

 

-400.5

 

 

 

 

 

-400.5

 

 

 

-427.6

 

2.2

 

23.1

 

21.6

 

18.9

 

0.9

 

-360.9

 

3.5

 

60.0

 

-297.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

From subsequent measurement

 

 

 

 

 

 

 

 

in € million

 

From interest

 

Income from other non-current loans

 

Dividends from other investments

 

Impairment losses

 

Derecognized receivables

 

Derecognized liabilities

 

Financial result affecting income 2017

 

Measurement cash flow hedges

 

Measurement financial instruments categorized as equity instruments

 

Total financial result 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt instruments carried at (amortized) cost

 

2.5

 

1.6

 

 

-22.2

 

1.3

 

 

-16.8

 

 

 

 

 

-16.8

Debt instruments measured at FV through P&L

 

-1.3

 

 

20.1

 

 

 

 

18.8

 

 

 

 

 

18.8

Debt instruments measured at FVOCI with reclassification

 

 

 

 

 

 

 

 

31.8

 

 

 

31.8

Equity instruments measured at FVOCI without reclassification

 

 

 

 

 

 

 

 

 

 

133.4

 

133.4

Financial liabilities measured at (amortized) cost

 

-314.5

 

 

 

 

 

0.9

 

-313.6

 

 

 

 

 

-313.6

 

 

-313.3

 

1.6

 

20.1

 

-22.2

 

1.3

 

0.9

 

-311.6

 

31.8

 

133.4

 

-146.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.
Fair Value
Valuation pursuant to IAS 40 in conjunction with IFRS 13. The estimated value of an asset. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.