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53 Additional Financial Instrument Disclosures

Additional Financial Instrument Disclosures – Fiscal year

Amounts recognized in balance sheet
in accordance with IFRS 9

Measurement categories and classes:
in € million

Carrying amounts
Dec. 31, 2023

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
Dec. 31, 2023

Fair value hierarchy level

Assets

Cash and cash equivalents

Cash on hand and deposits at banking
institutions

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
financial transactions*

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
accordance with IFRS 9

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
interest rate caps

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
accordance with IFRS 9

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.

  1. *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:
in € million

Carrying amounts
Dec. 31, 2022

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
Dec. 31, 2022

Fair value hierarchy level

Assets

Cash and cash equivalents

Cash on hand and deposits at banking
institutions

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
inventories

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
accordance with IFRS 9

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
accordance with IFRS 9

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:

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

2023

Debt instruments carried at (amortized) cost

227.5

60.6

-15.6

-12.0

-1.7

258.8

258.8

Derivatives measured
at FV through P&L

-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

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