Only the shareholding in Wintershall Dea GmbH is included in joint ventures. Reconciliation of the carrying amount of non-integral investments accounted for using the equity method (Million €) The increase in capital cost rates of one percentage point would not lead to an impairment of the shareholding as a whole but would, however, result in an impairment of around €250 million for value components in individual countries that were recognized in connection with BASF’s purchase price allocation. A decrease of 10% in price assumptions for the entire planning period would result in the need for an impairment of about €320 million of the shareholding as a whole. The cost of capital rates in euros, calculated using the capital asset pricing model, were between 3.4% and 14.4%. The expected cash flows were discounted using country-specific cost of capital rates, which reflect the relevant country risks and tax rates. The development of gas prices assumed a price of $3.8 per mmBtu (TTF) for 2021 that rises to a nominal $7.7 per mmBtu in 2025 and then follows the expected cost trend. This assumed an oil price of $43 per bbl of Brent crude in 2021 that expected rises to a nominal $62 per bbl by 2023 and then develops in line with cost increases. As part of the impairment tests, the expected cash flows in euros from the exploration and production assets held by Wintershall Dea were updated and discounted. This was primarily due to impairments of assets of Wintershall Dea Group amounting to €791 million as a result of lower oil and gas price forecasts and changed reserve estimates. Income from non-integral companies accounted for using the equity method decreased by €776 million in 2020. Income from non-integral companies accounted for using the equity method Income from non-integral companies accounted for using the equity method (Million €) The following table contains financial information on the material integral company accounted for using the equity method, BASF-YPC Company Ltd.
Financial information on the material integral investment accounted for using the equity method Transfers in 2020 included dividend payments from BASF-YPC Company Ltd. in 2020, and €9 million in 2019.ĭisposals in 2020 included primarily a capital decrease in the amount of €8 million at Yara Freeport LLC, Wilmington, Delaware. Of that, –€17 million related to BASF-YPC Company Ltd. Proportional changes of other comprehensive income included income and expense recognized directly in equity and related primarily to currency effects. Proportional changes of other comprehensive incomeĬarrying amount according to the equity method as of the end of the year Proportional income after taxes and other adjustments to income and expenses Reconciliation of the carrying amount of integral shareholdings accounted for using the equity method (Million €)Ĭarrying amount according to the equity method as of the beginning of the year 10.1 Integral companies accounted for using the equity method
Similarly, integral and non-integral shareholdings accounted for using the equity method are also shown separately in the balance sheet. Income from integral companies accounted for using the equity method is presented in the BASF Group’s EBIT, and income from non-integral companies accounted for using the equity method is presented together with income from other financial assets in the BASF Group’s net income from shareholdings. Under this method, costs of successful exploratory drilling as well as successful and dry development wells are capitalized. Furthermore, earnings and the carrying amount are adjusted when accounting policies deviate or as a result of purchase price allocations, which primarily affects Wintershall Dea GmbH, Kassel/Hamburg, Germany.Įxploration and development expenses in the oil and gas business, for which the equity method is applied, are accounted for using the successful efforts method.
Should there be indications of a reduction in the value of an investment, an impairment test is conducted and, if necessary, an impairment is recognized in the income statement.
Accounted pro#
The carrying amounts of shareholdings are adjusted annually based on the pro rata share of net income, dividends and other changes in equity. Joint ventures and associated companies are accounted for using the equity method.
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