53 Additional Financial Instrument Disclosures
Additional Financial Instrument Disclosures – Fiscal year
Amounts recognized in balance sheet | |||||||||||||||||||
Measurement categories and classes: | Carrying amounts | Amortized cost | Fair value affecting net income | Fair value recognized in equity without reclassification | Hedge accounting – no classification in accordance with IFRS 9 | Amounts recognized in balance sheet in acc. with IAS 28/IFRS 16 | Fair value | Fair value hierarchy level | |||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash on hand and deposits at banking | 1,374.4 | 1,374.4 | 1,374.4 | n.a. | |||||||||||||||
Trade receivables | 593.2 | 593.2 | 593.2 | n.a. | |||||||||||||||
Financial assets | |||||||||||||||||||
Investments valued at equity | 157.9 | 157.9 | n.a. | ||||||||||||||||
Finance lease receivables | 15.7 | 15.7 | n.a. | ||||||||||||||||
Other current financial receivables from | 318.1 | 318.1 | 318.1 | 2 | |||||||||||||||
Loans to other investments | 187.6 | 187.6 | 191.5 | 2 | |||||||||||||||
Other non-current loans | 21.6 | 21.6 | 21.6 | 2 | |||||||||||||||
Other non-current loans to associates and joint ventures | 682.9 | 682.9 | 682.9 | 2 | |||||||||||||||
Non-current securities | 5.9 | 5.9 | 5.9 | 1 | |||||||||||||||
Other investments | 321.7 | 321.7 | 321.7 | 2 | |||||||||||||||
Derivative financial assets | |||||||||||||||||||
Cash flow hedges – no classification in | 8.9 | -2.8 | 11.7 | 8.9 | 2 | ||||||||||||||
Call option on equity instruments | 838.0 | 838.0 | 838.0 | 3 | |||||||||||||||
Stand-alone interest rate swaps and | 63.8 | 63.8 | 63.8 | 2 | |||||||||||||||
Liabilities | |||||||||||||||||||
Trade payables | 493.4 | 493.4 | 493.4 | n.a. | |||||||||||||||
Bonds | 24,428.7 | 24,428.7 | 21,386.5 | 1 | |||||||||||||||
Other non-derivative financial liabilities | 18,468.4 | 18,468.4 | 17,087.8 | 2 | |||||||||||||||
Derivatives and put options | |||||||||||||||||||
Purchase price liabilities from put options/rights to reimbursement | 316.2 | 316.2 | 220.9 | 3 | |||||||||||||||
Stand-alone interest rate swaps and interest rate caps | 10.6 | 10.6 | 10.6 | 2 | |||||||||||||||
Cash flow hedges – no classification in | 48.7 | 0.1 | 48.6 | 48.7 | 2 | ||||||||||||||
Lease liabilities | 673.2 | 673.2 | n.a. | ||||||||||||||||
Liabilities from tenant financing | 154.1 | 154.1 | 154.1 | n.a. | |||||||||||||||
Liabilities to non-controlling interests | 198.4 | 198.4 | 198.4 | n.a. | |||||||||||||||
- *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 | |||||||||||||||||||
Measurement categories and classes: | Carrying amounts | Amortized cost | Fair value affecting net income | Fair value recognized in equity without reclassification | Hedge accounting – no classification in accordance with IFRS 9 | Amounts recognized in balance sheet in acc. with IAS 28/IFRS 16 | Fair value | Fair value hierarchy level | |||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | |||||||||||||||||||
Cash on hand and deposits at banking | 1,101.8 | 1,101.8 | 1,101.8 | n.a. | |||||||||||||||
Money market funds | 200.6 | 200.6 | 200.6 | n.a. | |||||||||||||||
Trade receivables | |||||||||||||||||||
Receivables from the sale of properties | 47.2 | 47.2 | 47.2 | n.a. | |||||||||||||||
Receivables from property letting | 44.9 | 44.9 | 44.9 | n.a. | |||||||||||||||
Other receivables from trading | 41.3 | 41.3 | 41.3 | n.a. | |||||||||||||||
Receivables from the sale of real estate | 196.8 | 196.8 | 196.8 | n.a. | |||||||||||||||
Financial assets | |||||||||||||||||||
Investments valued at equity | 240.1 | 240.1 | n.a. | ||||||||||||||||
Finance lease receivables | 23.7 | 23.7 | n.a. | ||||||||||||||||
Loans to other investments | 33.1 | 33.1 | 33.2 | 2 | |||||||||||||||
Other non-current loans | 11.5 | 11.5 | 11.5 | 2 | |||||||||||||||
Other non-current loans to associates and joint ventures | 825.9 | 825.9 | 825.9 | 2 | |||||||||||||||
Non-current securities | 5.5 | 5.5 | 5.5 | 1 | |||||||||||||||
Other investments | 398.6 | 398.6 | 398.6 | 2 | |||||||||||||||
Derivative financial assets | |||||||||||||||||||
Cash flow hedges – no classification in | 115.1 | -10.1 | 125.2 | 115.1 | 2 | ||||||||||||||
Stand-alone interest rate swaps and interest rate caps | 99.8 | 99.8 | 99.8 | 2 | |||||||||||||||
Liabilities | |||||||||||||||||||
Trade payables | 568.5 | 568.5 | 568.5 | n.a. | |||||||||||||||
Bonds | 25,900.2 | 25,900.2 | 21,229.2 | 1 | |||||||||||||||
Other non-derivative financial liabilities | 19,159.5 | 19,159.5 | 16,554.2 | 2 | |||||||||||||||
Derivatives and put options | |||||||||||||||||||
Purchase price liabilities from put options/rights to reimbursement | 270.9 | 270.9 | 189.6 | 3 | |||||||||||||||
Cash flow hedges – no classification in | 1.3 | 1.3 | 1.3 | 2 | |||||||||||||||
Lease liabilities | 682.5 | 682.5 | n.a. | ||||||||||||||||
Liabilities from tenant financing | 155.1 | 155.1 | 155.1 | n.a. | |||||||||||||||
Liabilities to non-controlling interests | 235.8 | 235.8 | 235.8 | n.a. | |||||||||||||||
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 € 2.5 million (December 31, 2022: € 2.6 million).
- Amount by which the fair value of plan assets exceeds the corresponding obligation of € 1.5 million (December 31, 2022: € 1.6 million).
- Provisions for pensions and similar obligations: € 512.4 million (December 31, 2022: € 512.5 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, 2023 | Level 1 | Level 2 | Level 3 | ||||
Assets | ||||||||
Investment properties | 81,120.3 | 81,120.3 | ||||||
Financial assets | ||||||||
Non-current securities | 5.9 | 5.9 | ||||||
Other investments | 321.7 | 321.7 | ||||||
Assets held for sale | ||||||||
Investment properties (contract closed) | 313.1 | 313.1 | ||||||
Derivative financial assets | ||||||||
Cash flow hedges | 8.9 | 8.9 | ||||||
Call option on equity instruments | 838.0 | 838.0 | ||||||
Stand-alone interest rate swaps and caps | 63.8 | 63.8 | ||||||
Liabilities | ||||||||
Derivative financial liabilities | ||||||||
Cash flow hedges | 48.7 | 48.7 | ||||||
Stand-alone interest rate swaps and caps | 10.6 | 10.6 | ||||||
in € million | Dec. 31, 2022 | Level 1 | Level 2 | Level 3 | ||||
Assets | ||||||||
Investment properties | 92,300.1 | 92,300.1 | ||||||
Financial assets | ||||||||
Non-current securities | 5.5 | 5.5 | ||||||
Other investments | 398.6 | 398.6 | ||||||
Assets held for sale | ||||||||
Investment properties (contract closed) | 70.8 | 70.8 | ||||||
Derivative financial assets | ||||||||
Cash flow hedges | 115.1 | 115.1 | ||||||
Stand-alone interest rate swaps and caps | 99.8 | 99.8 | ||||||
Liabilities | ||||||||
Derivative financial liabilities | ||||||||
Cash flow hedges | 1.3 | 1.3 | ||||||
Stand-alone interest rate swaps and caps | – | – | ||||||
Accounting Policies
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).
Securities are generally measured using the quoted prices in active markets (Level 1).
All investments in equity instruments that do not relate to associates or call options to buy back shares (Level 3) are measured at fair value in other comprehensive income. The Group’s primary aim is to hold its investments in equity instruments in the long term for strategic purposes. Measurement is at Level 3, as the share price of the relevant investments and the partly underlying cash flows are not directly observable. They are measured either directly via the share price or using a discounted cash flow model.
The fair value of the bonds listed on the market is calculated based on the market prices that apply on the reporting date (Level 1).
The fair value of the other non-derivative financial liabilities is calculated by means of a discounted cash flow (DCF) model. In addition to the tenor-specific EURIBOR/STIBOR rates (3M; 6M), Vonovia’s own credit risk is also used here (Level 2).
For the measurement of derivative financial instruments, cash flows are first 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.
As part of the valuation of the cross currency swaps, the USD cash flows were converted into EUR using the EUR/USD FX forward curve, after which all EUR cash flows are discounted using the 6M EURIBOR curve (Level 2).
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.
No financial instruments were reclassified to different hierarchy levels vis-à-vis the comparative period.
Due to the current interest rate environment (and the return to more positive market values as a result), counterparty risk premiums were relevant for the interest rate swaps in the consolidated financial statements alongside Vonovia’s own credit risk. As with Vonovia’s own risk, they are derived from rates observable on the capital markets and ranged from 10 to 160 basis points, depending on the residual maturities. Vonovia’s own risk premiums were trading at between 70 and 190 basis points on the same cut-off date, depending on the maturities.
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. 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.
Net results according to measurement category – Fiscal year
From subsequent measurement | |||||||||||||||||||||||||
in € million | From interest | Income from other non-current loans | Measurement of call options | Dividends from other investments | Impairment losses | Expected credit loss: Other non-current loans to associates | Derecognized receivables | Derecognized liabilities | Financial result affecting income 2023 | Measurement of cash flow hedges | Measurement of financial instruments categorized as equity instruments | Total financial result | |||||||||||||
2023 | |||||||||||||||||||||||||
Debt instruments carried at (amortized) cost | 227.5 | 60.6 | – | -15.6 | -12.0 | -1.7 | – | 258.8 | – | – | 258.8 | ||||||||||||||
Derivatives measured | -3.1 | – | 90.0 | – | – | – | – | – | 86.9 | – | – | 86.9 | |||||||||||||
Effective hedge accounting – no classification in accordance with IFRS 9 | – | – | – | – | – | – | – | – | – | -93.0 | – | -93.0 | |||||||||||||
Equity instruments measured at FVOCI without reclassification | – | – | – | 22.1 | – | – | – | – | 22.1 | – | -28.5 | -6.4 | |||||||||||||
Financial liabilities measured at (amortized) cost | -764.9 | – | – | – | – | – | – | 1.3 | -763.6 | – | – | -763.6 | |||||||||||||
-540.5 | 60.6 | 90.0 | 22.1 | -15.6 | -12.0 | -1.7 | 1.3 | -395.8 | -93.0 | -28.5 | -517.3 | ||||||||||||||
Net results according to measurement category – Previous year
From subsequent measurement | |||||||||||||||||||||||
in € million | From interest | Income from other non-current loans | Dividends from other investments | Impairment losses | Expected credit loss: Other non-current loans to associates | Derecognized receivables | Derecognized liabilities | Financial result affecting income 2022 | Measurement of cash flow hedges | Measurement of financial instruments categorized as equity instruments | Total financial result | ||||||||||||
2022 | |||||||||||||||||||||||
Debt instruments carried at (amortized) cost | 110.7 | 50.1 | – | -25.8 | -24.1 | -2.9 | – | 108.0 | – | – | 108.0 | ||||||||||||
Derivatives measured at FV through P&L | 141.8 | – | – | – | – | – | – | 141.8 | – | – | 141.8 | ||||||||||||
Effective hedge accounting – no classification in accordance with IFRS 9 | – | – | – | – | – | – | – | – | 72.9 | – | 72.9 | ||||||||||||
Equity instruments measured at FVOCI without reclassification | – | – | 21.2 | – | – | – | – | 21.2 | – | -17.1 | 4.1 | ||||||||||||
Financial liabilities measured at (amortized) cost | -479.9 | – | – | – | – | – | -0.2 | -480.1 | – | – | -480.1 | ||||||||||||
-227.4 | 50.1 | 21.2 | -25.8 | -24.1 | -2.9 | -0.2 | -209.1 | 72.9 | -17.1 | -153.3 | |||||||||||||