52 Additional Financial Instrument Disclosures
Additional Financial Instrument Disclosures – Fiscal year
Amounts recognized in balance sheet in accordance with IFRS 9 |
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Measurement categories and classes: in € million |
Carrying amounts Dec. 31, 2021 |
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, 2021 |
Fair value hierarchy level |
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Assets |
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Cash and cash equivalents |
|||||||||||||||||||
Cash on hand and deposits at banking institutions |
1,134.0 |
1,134.0 |
1,134.0 |
1 |
|||||||||||||||
Money market funds |
298.8 |
298.8 |
298.8 |
2 |
|||||||||||||||
Trade receivables |
|||||||||||||||||||
Receivables from the sale of properties |
104.6 |
104.6 |
104.6 |
2 |
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Receivables from property letting |
48.6 |
48.6 |
48.6 |
2 |
|||||||||||||||
Other receivables from trading |
32.7 |
32.7 |
32.7 |
2 |
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Receivables from the sale of real estate inventories (Development) |
264.0 |
264.0 |
264.0 |
2 |
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Financial assets |
|||||||||||||||||||
Investments valued at equity |
548.9 |
548.9 |
548.9 |
n.a. |
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Finance lease receivables |
23.7 |
23.7 |
23.7 |
||||||||||||||||
Other current financial receivables from financial transactions* |
499.6 |
499.6 |
499.6 |
2 |
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Loans to other investments |
33.2 |
33.2 |
54.8 |
2 |
|||||||||||||||
Other non-current loans |
511.8 |
511.8 |
511.8 |
2 |
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Other non-current loans to associates and joint ventures |
563.1 |
563.1 |
563.1 |
2 |
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Non-current securities |
5.2 |
5.2 |
5.2 |
1 |
|||||||||||||||
Other investments |
377.0 |
377.0 |
377.0 |
2 |
|||||||||||||||
Derivative financial assets |
|||||||||||||||||||
Cash flow hedges (cross currency swaps) |
35.8 |
-14.0 |
49.8 |
35.8 |
2 |
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Stand-alone interest rate swaps and interest rate caps as well as embedded derivatives |
30.6 |
30.6 |
30.6 |
2 |
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Liabilities |
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Trade payables |
449.8 |
449.8 |
449.8 |
2 |
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Non-derivative financial liabilities |
47,029.0 |
47,029.0 |
-47,596.5 |
2 |
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Derivative financial liabilities |
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Purchase price liabilities from put options/rights to reimbursement |
264.0 |
264.0 |
264.0 |
3 |
|||||||||||||||
Stand-alone interest rate swaps and interest rate caps |
53.9 |
53.9 |
53.9 |
2 |
|||||||||||||||
Cash flow hedges |
14.3 |
11.4 |
2.9 |
14.3 |
2 |
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Lease liabilities |
679.1 |
679.1 |
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Liabilities from tenant financing |
157.5 |
157.5 |
157.5 |
2 |
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Liabilities to non-controlling interests |
240.5 |
240.5 |
240.5 |
2 |
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- * This includes time deposits and short-term investments in highly liquid money market funds with an original maturity of more than three months.
Additional Financial Instrument Disclosures – Previous year
Amounts recognized in balance sheet in accordance with IFRS 9 |
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Measurement categories and classes: in € million |
Carrying amounts Dec. 31, 2020 |
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, 2020 |
Fair value hierarchy level |
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Assets |
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Cash and cash equivalents |
||||||||||||||||||
Cash on hand and deposits at banking institutions |
613.3 |
613.3 |
613.3 |
1 |
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Trade receivables |
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Receivables from the sale of properties |
65.3 |
65.3 |
65.3 |
2 |
||||||||||||||
Receivables from property letting |
38.0 |
38.0 |
38.0 |
2 |
||||||||||||||
Other receivables from trading |
16.0 |
16.0 |
16.0 |
2 |
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Receivables from the sale of real estate inventories (Development) |
149.6 |
149.6 |
149.6 |
2 |
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Financial assets |
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Investments valued at equity |
32.9 |
32.9 |
32.9 |
n.a. |
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Loans to other investments |
33.3 |
33.3 |
63.3 |
2 |
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Other non-current loans |
11.3 |
11.3 |
11.3 |
2 |
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Non-current securities |
4.9 |
4.9 |
4.9 |
1 |
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Other investments |
311.2 |
311.2 |
311.2 |
2 |
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Derivative financial assets |
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Cash flow hedges (cross currency swaps) |
18.8 |
-13.1 |
31.9 |
18.8 |
2 |
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Stand-alone interest rate swaps and interest rate caps as well as embedded derivatives |
4.0 |
4.0 |
4.0 |
2 |
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Liabilities |
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Trade payables |
234.5 |
234.5 |
234.5 |
2 |
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Non-derivative financial liabilities |
24,084.7 |
24,084.7 |
25,767.7 |
2 |
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Derivative financial liabilities |
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Purchase price liabilities from put options/rights to reimbursement |
220.5 |
220.5 |
220.5 |
3 |
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Stand-alone interest rate swaps and interest rate caps |
47.2 |
47.2 |
47.2 |
2 |
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Cash flow hedges |
31.3 |
12.1 |
19.2 |
31.3 |
2 |
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Lease liabilities |
495.1 |
495.1 |
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Liabilities from tenant financing |
163.4 |
163.4 |
163.4 |
2 |
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Liabilities to non-controlling interests |
43.1 |
43.1 |
43.1 |
2 |
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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 € 3.5 million (Dec. 31, 2020: € 4.3 million).
- Amount by which the fair value of plan assets exceeds the corresponding obligation of € 1.0 million (Dec. 31, 2020: € 0.8 million).
- Provisions for pensions and similar obligations: € 684.5 million (Dec. 31, 2020: € 627.8 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:
Assets and liabilities
in € million | Dec. 31, 2021 | Level 1 | Level 2 | Level 3 | ||||
Assets | ||||||||
Investment properties | 94,100.1 | 94,100.1 | ||||||
Financial assets | ||||||||
Non-current securities | 5.2 | 5.2 | ||||||
Other investments | 377.0 | 377.0 | ||||||
Assets held for sale | ||||||||
Investment properties (contract closed) | 1,661.5 | 1,661.5 | ||||||
Derivative financial assets | ||||||||
Cash flow hedges (cross currency swaps) | 35.8 | 35.8 | ||||||
Stand-alone interest rate swaps and caps as well as embedded derivatives | 30.6 | 30.6 | ||||||
Liabilities | ||||||||
Derivative financial liabilities | ||||||||
Cash flow hedges | 14.3 | 14.3 | ||||||
Stand-alone interest rate swaps and caps | 53.9 | 53.9 | ||||||
in € million | Dec. 31, 2020 | Level 1 | Level 2 | Level 3 | ||||
Assets | ||||||||
Investment properties | 58,071.8 | 58,071.8 | ||||||
Financial assets | ||||||||
Non-current securities | 4.9 | 4.9 | ||||||
Other investments | 311.2 | 311.2 | ||||||
Assets held for sale | ||||||||
Investment properties (contract closed) | 164.9 | 164.9 | ||||||
Derivative financial assets | ||||||||
Cash flow hedges (cross currency swaps) | 18.8 | 18.8 | ||||||
Stand-alone interest rate swaps and caps as well as embedded derivatives | 4.0 | 4.0 | ||||||
Liabilities | ||||||||
Derivative financial liabilities | ||||||||
Cash flow hedges | 31.3 | 31.3 | ||||||
Stand-alone interest rate swaps and caps | 47.2 | 47.2 | ||||||
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 from 5 to 155 basis points, depending on the residual maturities of financial instruments. Regarding the positive market values of the cross currency swaps, a counterparty risk of 15 basis points was taken into account.
The calculated cash flows of the cross currency swaps result from the forward curves for USD/EUR. The cash flows are discounted on the basis of the reference interest rate of each currency (STIBOR and EURIBOR) and translated into euros at the current exchange rate (Level 2).
The fair values of the cash and cash equivalents, trade receivables and 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.
Net results according to measurement category – Fiscal year
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 2021 | Measurement of cash flow hedges | Measurement of financial instruments categorized as equity instruments | Total financial result 2021 | |||||||||||
2021 | |||||||||||||||||||||
Debt instruments carried at (amortized) cost | 21.1 | 13.1 | – | -23.2 | -2.5 | – | 8.5 | – | – | 8.5 | |||||||||||
Debt instruments measured at FVOCI | – | – | 27.7 | – | – | – | 27.7 | – | – | 27.7 | |||||||||||
Derivatives measured at FV through P&L with reclassification | -0.2 | – | – | – | – | – | -0.2 | – | – | -0.2 | |||||||||||
Debt instruments measured at FVOCI with reclassification | – | – | – | – | – | – | – | 26.1 | – | 26.1 | |||||||||||
Equity instruments measured at FVOCI without reclassification | – | – | – | – | – | – | – | – | 81.1 | 81.1 | |||||||||||
Financial liabilities measured at (amortized) cost | -385.4 | – | – | – | – | 3.5 | -381.9 | – | – | -381.9 | |||||||||||
-364.5 | 13.1 | 27.7 | -23.2 | -2.5 | 3.5 | -345.9 | 26.1 | 81.1 | -238.7 | ||||||||||||
Net results according to measurement category – Previous year
From subsequent measurement | ||||||||||||||||||
in € million | From interest | Dividends from other investments | Impairment losses | Derecognized receivables | Derecognized liabilities | Financial result affecting income 2020 | Measurement of cash flow hedges | Measurement of financial instruments categorized as equity instruments | Total financial result 2020 | |||||||||
2020 | ||||||||||||||||||
Debt instruments carried at (amortized) cost | 21.8 | – | -40.0 | 0.0 | – | -18.2 | – | – | -18.2 | |||||||||
Debt instruments measured at FVOCI | – | 13.4 | – | – | – | 13.4 | – | – | 13.4 | |||||||||
Derivatives measured at FV through P&L with reclassification | -59.2 | – | – | – | – | -59.2 | – | – | -59.2 | |||||||||
Debt instruments measured at FVOCI with reclassification | – | – | – | – | – | – | 24.0 | – | 24.0 | |||||||||
Equity instruments measured at FVOCI without reclassification | – | – | – | – | – | – | – | 9.0 | 9.0 | |||||||||
Financial liabilities measured at (amortized) cost | -329.8 | – | – | – | 0.7 | -329.1 | – | – | -329.1 | |||||||||
-367.2 | 13.4 | -40.0 | 0.0 | 0.7 | -393.1 | 24.0 | 9.0 | -360.1 | ||||||||||