Capital Structure, Investments, and Financing Activities

(36) Other financial assets

Accounting and measurement policies
Other financial assets

This section does not cover the accounting and measurement policies for derivative financial instruments. They are presented in Note (39) “Derivative financial instruments”.

Recognition and initial measurement

Financial assets are initially measured at fair value and recognized as of the settlement date. For financial assets not subsequently measured at fair value through profit or loss in subsequent periods, initial measurement also includes directly attributable transaction costs. Any difference between the fair value of a financial instrument on initial recognition (Level 2 and 3 in the IFRS 13 fair value hierarchy) and the transaction price is recognized in income on a straight-line basis over the duration.

Detailed information on the measurement methods for financial assets measured at fair value are presented in Note (43) “Information on fair value measurement”.

Classification and subsequent measurement

On initial recognition, financial assets are assigned to one of the following measurement categories, which also correspond to the financial instrument classes as defined in IFRS 9:

  • Subsequent measurement at amortized cost
  • Subsequent measurement at fair value through other comprehensive income
  • Subsequent measurement at fair value through profit or loss.

This classification is based on the business model and the structure of contractual payment flows. Financial assets measured at amortized cost and financial assets at fair value through other comprehensive income are accounted for using the effective interest method and taking account of any impairment losses. The procedure for calculating impairment losses is described in Note (42) “Management of financial risks”.

Financial assets measured at amortized cost are held in order to collect their contractual cash flows, which are exclusively principal repayments and interest payments on the outstanding capital amount. In the case of financial assets at fair value through other comprehensive income, the business model provides for the collection of the contractual cash flows as well as the sale of the financial assets. The cash flows for this class are also exclusively principal repayments and interest payments on the outstanding capital amount.

Except for derivative financial instruments with positive market values, the Group only applies subsequent measurement at fair value through profit or loss for debt instruments with contractual properties resulting in cash flows that do not exclusively represent principal repayments and interest payments on the outstanding capital amount. In particular, this includes contingent consideration that was contractually agreed with the acquirer in the context of the disposal of businesses within the meaning of IFRS 3 (see Note (43) “Information on fair value measurement”). The Group does not utilize the option of the subsequent measurement of debt instruments at fair value through profit or loss.

Equity instruments are measured at fair value through other comprehensive income if they are intended to be held for the longer term. Further details on the measurement of equity instruments at fair value are presented in Note (43) “Information on fair value measurement”.

Financial assets are only reclassified in the event of changes to the business model regarding the management of financial assets.

Derecognition

Financial assets are derecognized if the claim for the compensation is fulfilled by the other counterparty, if there is no longer a reasonable expectation that the counterparty will fulfill its contractual obligations, or if the Group transfers the contractual rights including all material risks and rewards of the financial asset to another counterparty.

Recognition

Measurement effects of debt instruments are reported in the consolidated balance sheet, the consolidated income statement and the consolidated statement of comprehensive income as follows:

Measurement effects of debt instruments

Category

 

Asset type

 

Impairment losses/reversals of impairment losses

 

Net gain and net loss on disposal/value adjustments

 

Foreign currency gains or losses

 

Interest income or expenses

Subsequent measurement at amortized cost

 

Operational

 

Impairment losses, and reversals of impairment losses of financial assets (net)

 

Other operating income or other operating expenses

 

Other operating income or other operating expenses

 

Financial income and expenses (applying the effective interest method)

 

Financial

 

Financial income and expenses

 

Financial income and expenses

 

Financial income and expenses

 

Subsequent measurement at fair value through other comprehensive income

 

Operational

 

Impairment losses, and reversals of impairment losses of financial assets (net)

 

Group equity (upon derecognition: reclassification to other operating income or other operating expenses)

 

Other operating income or other operating expenses

 

Financial income and expenses (applying the effective interest method)

 

Financial

 

Financial income and expenses

 

Group equity (upon derecognition: reclassification to financial income and expenses)

 

Financial income and expenses

 

Subsequent measurement at fair value through profit or loss

 

Operational

 

 

 

Other operating income or other operating expenses

 

Other operating income or other operating expenses

 

Financial income and expenses

 

Financial

 

 

Financial income and expenses

 

Financial income and expenses

 

Income from the unwinding of discounts and income and expenses from interest rate-induced changes in contingent considerations measured at fair value through profit or loss subsequent to initial recognition are recognized in financial income and expenses.

The following table provides details on the measurement effects of equity instruments on the consolidated balance sheet, the consolidated income statement and the consolidated statement of comprehensive income:

Measurement effects of equity instruments

Category

 

Asset type

 

Value adjustments

 

Foreign currency
gains or losses

 

Dividend income

Subsequent measurement at fair value through other comprehensive income

 

Operational

 

Results recognized directly in equity (value adjustments)

 

Foreign currency gains and losses recognized directly in equity

 

Other operating income

 

 

Reclassification of the cumulative results previously recognized directly in equity in the retained earnings when asset is disposed

 

 

 

Financial

 

Results recognized directly in equity (value adjustments)

 

Foreign currency gains and losses recognized directly in equity

 

Financial income

 

 

Reclassification of the cumulative results previously recognized directly in equity in the retained earnings when asset is disposed

 

 

Subsequent measurement at fair value through profit or loss

 

Operational

 

Other operating income or other operating expenses

 

Other operating income or other operating expenses

 

Other operating income

 

Financial

 

Financial income and expenses

 

Financial income and expenses

 

Financial income

At the reporting date, other financial assets were composed as follows:

Other financial assets

 

 

Dec. 31, 2024

 

Dec. 31, 2023

€ million

 

current

 

non-current

 

Total

 

current

 

non-current

 

Total

Subsequent measurement
at amortized cost

 

559

 

3

 

562

 

201

 

4

 

204

Loans against third parties

 

1

 

3

 

4

 

1

 

4

 

4

Other

 

558

 

 

558

 

200

 

 

200

Subsequent measurement
at fair value through other comprehensive income

 

 

799

 

799

 

198

 

644

 

842

Equity instruments

 

 

798

 

798

 

 

643

 

643

Debt instruments

 

 

1

 

1

 

198

 

1

 

199

Subsequent measurement
at fair value through profit and loss

 

75

 

370

 

445

 

63

 

333

 

396

Contingent consideration

 

 

151

 

151

 

 

125

 

125

Other debt instruments

 

 

162

 

162

 

33

 

161

 

194

Derivatives without a hedging relationship (financial transactions)

 

70

 

 

70

 

27

 

 

27

Derivatives without a hedging relationship (operational)

 

5

 

57

 

61

 

3

 

47

 

50

Derivatives with a hedging relationship (operational)

 

8

 

 

8

 

37

 

 

37

Financial assets

 

642

 

1.172

 

1.814

 

499

 

981

 

1.480

The increase in other current financial assets measured at amortized cost subsequent to initial recognition primarily related to short-term investments in structured products based on marketable greenhouse gas emission certificates.

Equity instruments subsequently measured at fair value through other comprehensive income mainly comprised shares in listed and unlisted companies that invest in innovative technologies and products or that are held as part of the future-oriented M Ventures portfolio:

Equity interests through other comprehensive income

€ million

 

Fair value
as of Dec. 31, 2024

 

Fair Value: hierarchy level IFRS 13

 

Fair value
as of Dec. 31, 2023

 

Fair Value: hierarchy level IFRS 13

Artios Pharma Limited, UK

 

<50

 

Level 3

 

<25

 

Level 3

Asceneuron SA, Switzerland

 

<25

 

Level 3

 

<15

 

Level 3

Celestial AI Inc., United States

 

<100

 

Level 3

 

<25

 

Level 3

DNA Script S.A.S., France

 

<25

 

Level 3

 

<50

 

Level 3

ElectronInks Inc., United States

 

<15

 

Level 3

 

<15

 

Level 3

Formo Bio GmbH, Germany

 

<15

 

Level 3

 

<15

 

Level 3

IDRX, Inc., United States

 

<25

 

Level 3

 

<25

 

Level 3

InfraServ GmbH & Co. Wiesbaden KG, Germany

 

<25

 

Level 3

 

<15

 

Level 3

iOnctura B.V., Netherlands

 

<25

 

Level 3

 

<15

 

Level 3

Lightcast Discovery Ltd., UK

 

<25

 

Level 3

 

<15

 

Level 3

MoonLake Immunotherapeutics Ltd., Cayman Islands

 

145

 

Level 1

 

152

 

Level 1

Mosa Meat B.V., Netherlands

 

<25

 

Level 3

 

<25

 

Level 3

Nouscom AG, Switzerland

 

<15

 

Level 3

 

<15

 

Level 3

Pictor Labs, Inc., USA

 

<15

 

Level 3

 

<15

 

Level 3

Plexium Inc., United States

 

<15

 

Level 3

 

<15

 

Level 3

Precigen, Inc., United States

 

19

 

Level 1

 

25

 

Level 1

SeeQC Inc., United States

 

<15

 

Level 3

 

<15

 

Level 3

Storm Therapeutics Limited, UK

 

<15

 

Level 3

 

<15

 

Level 3

Theolytics Ltd., UK

 

<15

 

Level 3

 

<15

 

Level 3

Vera Therapeutics, Inc., United States

 

78

 

Level 1

 

27

 

Level 1

Vizgen Inc., United States

 

<15

 

Level 3

 

 

 

 

Wiliot Ltd., Israel

 

<25

 

Level 3

 

<25

 

Level 3

Other (notation in an active market)

 

2

 

Level 1

 

3

 

Level 1

Other (no notation in an active market)

 

221

 

Level 3

 

184

 

Level 3

 

 

 

 

 

 

 

 

 

Total

 

798

 

 

 

643

 

 

Debt instruments measured at fair value through other comprehensive income subsequent to initial recognition declined in fiscal 2024 due to money market instruments maturing.

As in the previous year, contingent consideration primarily included claims arising from the divestment of the biosimilars business to a subsidiary of Fresenius SE & Co. KGaA, Bad Homburg vor der Höhe, in 2017.

Details on disposals of equity instruments measured at fair value through other comprehensive income are provided in the following table.

Disposals of equity instruments measured at fair value

€ million

 

Reasons for the disposal

 

Fair value on the date of derecognition

 

The cumulative gain (+) or loss (-) on disposal recognized in other comprehensive income

 

Transfer of the cumulative gains (+) or losses (-) within group equity to retained earnings

2024

 

 

 

 

 

 

 

 

Equity instruments with subsequent measurement at fair value through other comprehensive income

 

Portfolio adjustment/restructuring and full acquisition by third parties

 

7

 

 

 

 

 

 

 

 

 

 

 

2023

 

 

 

 

 

 

 

 

MoonLake Immunotherapeutics Ltd., Cayman Islands

 

Partial sale

 

11

 

10

 

10

Other equity instruments with subsequent measurement at fair value through other comprehensive income

 

Portfolio adjustment/restructuring and full acquisition by third parties

 

29

 

18

 

17

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