Annual Report 2019

51 Additional Financial Instrument Disclosures

 

 

Amounts recognized in balance sheet in accordance with IFRS 9

 

 

 

Measurement categories and classes:

in € million

Carrying amounts
Dec. 31, 2019

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 IFRS 16/IAS 28

Fair value Dec. 31, 2019

Fair value hierarchy level

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

 

 

Cash on hand and deposits at banking institutions

500.7

500.7

 

 

 

 

500.7

1

Trade receivables

 

 

 

 

 

 

 

 

Receivables from the sale of properties

66.6

66.6

 

 

 

 

66.6

2

Receivables from property letting

41.7

41.7

 

 

 

 

41.7

2

Other receivables from trading

11.8

11.8

 

 

 

 

11.8

2

Receivables from sale of real estate inventories (Development)

85.6

85.6

 

 

 

 

85.6

2

Financial assets

 

 

 

 

 

 

 

 

Investments valued at equity

29.5

 

 

 

 

29.5

29.5

n. a.

Loans to other investments

33.3

33.3

 

 

 

 

56.8

2

Other non-current loans

11.7

11.7

 

 

 

 

11.7

2

Non-current securities

4.4

 

 

 

4.4

 

4.4

1

Other investments

142.2

 

 

 

142.2

 

142.2

2

Derivative financial assets

 

 

 

 

 

 

 

 

Cash flow hedges (cross currency swaps)

29.8

 

-10.2

40.0

 

 

29.8

2

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

3.3

 

3.3

 

 

 

3.3

2

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Trade payables

224.2

224.2

 

 

 

 

224.2

2

Non-derivative financial liabilities

23,574.9

23,574.9

 

 

 

 

24,724.7

2

Derivative financial liabilities

 

 

 

 

 

 

 

 

Purchase price liabilities from put options/rights to reimbursement

39.0

39.0

 

 

 

 

39.0

2

Stand-alone interest rate swaps and interest rate caps

52.5

 

52.5

 

 

 

52.5

2

Other swaps

23.6

 

0.2

23.4

 

 

23.6

2

Lease liabilities

470.9

 

 

 

 

470.9

470.9

2

Liabilities from tenant financing

162.2

162.2

 

 

 

 

162.2

2

Liabilities to non-controlling interests

34.1

34.1

 

 

 

 

34.1

2

 

 

 

 

 

 

 

 

 

 

 

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

2

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

 

 

 

 

 

 

 

 

 

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 € 4.4 million (Dec. 31, 2018: € 4.7 million).
  • Amount by which the fair value of plan assets exceeds the corresponding obligation of € 0.8 million (Dec. 31, 2018: € 1.1 million).
  • Provisions for pensions and similar obligations: € 569.9 million (Dec. 31, 2018: € 520.6 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

Dec. 31, 2019

Level 1

Level 2

Level 3

 

 

 

 

 

Assets

 

 

 

 

Investment properties

52,759.1

 

 

52.759.1

Financial assets

 

 

 

 

Non-current securities

4.4

4.4

 

 

Other investments

140.2

 

140.2

 

Assets held for sale

 

 

 

 

Investment properties (contract closed)

134.1

 

134.1

 

Derivative financial assets

 

 

 

 

Cash flow hedges (cross currency swaps)

29.8

 

29.8

 

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

3.3

 

3.3

 

Liabilities

 

 

 

 

Derivative financial liabilities

 

 

 

 

Cash flow hedges

23.6

 

23.6

 

Stand-alone interest rate swaps and caps

52.5

 

52.5

 

 

 

 

 

 

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)

16.3

 

16.3

 

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

4.5

 

4.5

 

Liabilities

 

 

 

 

Derivative financial liabilities

 

 

 

 

Cash flow hedges

19.8

 

19.8

 

Stand-alone interest rate swaps and caps

54.6

 

54.6

 

 

 

 

 

 

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 chapter [D28] 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.

Securities and shares in listed companies included in other investments are generally 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 was fundamentally relevant for interest rate swaps. This credit risk is derived for material risks from rates observable on the capital markets and ranges of between 10 and 130 basis points, depending on the residual maturities of financial instruments. Regarding the positive market values of the cross currency swaps, a counterparty risk of 33 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.

 

 

 

From subsequent measurement

 

 

 

 

in € million

From
interest

Dividends from other invest­ments

Impair­ment losses

De­recognized receivables

De­recognized liabilities

Financial result affecting income 2019

Measure­ment cash flow hedges

Measure­ment financial instruments categorized as equity instruments

Total financial result 2019

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

Debt instruments carried at (amortized) cost

8.9

-28.6

5.2

-14.5

-14.5

Debt instruments measured at FV through P&L

11.8

11.8

11.8

Derivatives measured at FV through P&L with reclassification

-35.1

-35.1

-35.1

Debt instruments measured at FVOCI with reclassification

11.8

11.8

Equity instruments measured at FVOCI without reclassification

48.6

48.6

Financial liabilities measured at (amortized) cost

-358.4

0.7

-357.7

-357.7

 

-384.6

11.8

-28.6

5.2

0.7

-395.5

11.8

48.6

-335.1

 

 

 

 

 

 

 

 

 

 

 

 

 

From subsequent measurement

 

 

 

 

in € million

From interest

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

5.7

-21.6

1.1

-14.8

-14.8

Debt instruments measured at FV through P&L

23.1

23.1

23.1

Derivatives measured at FV through P&L with reclassification

-30.8

-30.8

-30.8

Debt instruments measured at FVOCI with reclassification

3.5

3.5

Debt instruments measured at FVOCI without reclassification

60.0

60.0

Financial liabilities measured at (amortized) cost

-375.2

0.9

-374.3

-374.3

 

-400.3

23.1

-21.6

1.1

0.9

-396.8

3.5

60.0

-333.3

 

 

 

 

 

 

 

 

 

 

Rating
Classification of debtors or securities with regard to their creditworthiness or credit quality according to credit ratings. The classification is generally performed by rating agencies.
Fair Value
Fair value is particularly relevant with regard to valuation in accordance with IAS 40 in conjunction with IFRS 13. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction.