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 [D27] Investment Properties.

Investment properties intended 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 foreign currency cash flows (AUD, GBP, CHF, NOK, SEK) were converted to EUR using the EUR/foreign currency FX forward curve, after which all EUR cash flows are discounted using the 6M EURIBOR curve (Level 2).

The value of the option components of the convertible bonds is determined on the basis of the contractual terms of the convertible bonds using the binomial model. On the respective reporting date, the valuation is based on the implied volatility of the share, the remaining term as well as the current share price (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.