(2) Reporting principles
These consolidated financial statements have been prepared in accordance with the international accounting rules based on the IFRS® Accounting Standards (IFRS) effective at the end of the reporting period and adopted by the European Union and the additional provisions of section 315e (1) of the German Commercial Code (HGB). The fiscal year is the calendar year. These consolidated financial statements have been prepared in euro, the reporting currency. The values presented in the consolidated financial statements have been rounded. This may lead to individual values not adding up to the totals presented.
The Executive Board of Merck KGaA, Darmstadt, Germany, prepared these consolidated financial statements on February 17, 2025, and approved them to be forwarded to the Supervisory Board. The Supervisory Board is responsible for examining the consolidated financial statements and declaring whether it approves them.
The accounting and measurement policies used in the consolidated financial statements are presented in the respective Notes and are indicated there.
Amendments to standards effective for the first time in fiscal 2024
Standard/Interpretation |
|
Title |
|
Date of publication |
|
Date of endorsement by EU law |
|
Impact on the consolidated financial statements |
|---|---|---|---|---|---|---|---|---|
Amendments to IAS 1 |
|
Classification of Liabilities as Current or Non-current; Classification of Liabilities as Current or Non-Current — Deferral of Effective Date |
|
January 23, 2020 July 15, 2020 |
|
December 19, 2023 |
|
No material impact |
Amendments to IAS 1 |
|
Non-current Liabilities with Covenants |
|
October 31, 2022 |
|
December 19, 2023 |
|
No material impact |
Amendments to IAS 7 |
|
Supplier Finance Arrangements |
|
May 25, 2023 |
|
May 15, 2024 |
|
No material impact |
Amendments to IFRS 7 |
|
Supplier Finance Arrangements |
|
May 25, 2023 |
|
May 15, 2024 |
|
No material impact |
Amendments to IFRS 16 |
|
Lease Liability in a Sale and Leaseback |
|
September 22, 2022 |
|
November 20, 2023 |
|
No material impact |
Amendments to standards effective for the first time from fiscal 2025
Standard/Interpretation |
|
Title |
|
Date of publication |
|
Date of endorsement by EU law |
|
Required date of first-time application1 |
|
Expected impact on the consolidated financial statements |
||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Amendments to IAS 21 |
|
Lack of Exchangeability |
|
August 15, 2023 |
|
November 12, 2024 |
|
January 1, 2025 |
|
No material impact |
||||
|
||||||||||||||
Standards and amendments to standards published but not yet endorsed by the European Union
Standard/Interpretation |
|
Title |
|
Date of publication |
|
Expected to be effective for the first time for financial years beginning on or after |
|
Expected impact on the consolidated financial statements |
|---|---|---|---|---|---|---|---|---|
Amendments to IFRS 7 |
|
Amendments to the Classification and Measurement of Financial Instruments |
|
May 30, 2024 |
|
January 1, 2026 |
|
Currently under review |
Amendments to IFRS 7 |
|
Contracts Referencing Nature-dependent Electricity |
|
December 18, 2024 |
|
January 1, 2026 |
|
Currently under review |
Amendments to IFRS 9 |
|
Amendments to the Classification and Measurement of Financial Instruments |
|
May 30, 2024 |
|
January 1, 2026 |
|
Currently under review |
Amendments to IFRS 9 |
|
Contracts Referencing Nature-dependent Electricity |
|
December 18, 2024 |
|
January 1, 2026 |
|
Currently under review |
IFRS 18 |
|
Presentation and Disclosure in Financial Statements |
|
April 9, 2024 |
|
January 1, 2027 |
|
Currently under review |
IFRS 19 |
|
Subsidiaries without Public Accountability: Disclosures |
|
May 9, 2024 |
|
January 1, 2027 |
|
No impact |
Amendments to various Standards |
|
Annual Improvements to IFRS – Volume 11 |
|
July 18, 2024 |
|
January 1, 2026 |
|
Currently under review |
Change in presentation within the cash flow statement
To improve the clarity and ease of understanding of the cash flow statement, the items “Payments for investments in financial assets” (2023: € 537 million) and “Payments for the acquisition of non-financial assets” (2023: € 2,494 million), which were presented separately in the previous year, have been combined under cash flow from investing activities to form the item “Payments for investments in other assets”. In addition, the items “Proceeds from the disposal of other financial assets” (2023: € 510 million) and “Proceeds from the disposal of non-financial assets” (2023: € 2,511 million) have been combined under cash flow from investing activities to form the item “Proceeds from the disposal of other assets”.
Accounting and measurement policies
Currency translation
Functional currency
The subsidiaries of Merck KGaA, Darmstadt, Germany, conduct their business largely in the respective local currency, which they use as their functional currency.
Some subsidiaries, particularly in the Healthcare and Electronics business sectors, use the euro or the U.S. dollar as their functional currency rather than the local currency.
Transactions in non-functional currency
When the financial statements of consolidated companies are prepared, business transactions that are conducted in currencies other than the functional currency are translated using the exchange rate on the date of the transaction.
Translation of financial statements into the reporting currency (euro)
The financial statements of consolidated companies not using the euro as their functional currency are translated into the reporting currency, the euro. Assets and liabilities are measured at the closing rate while income and expenses are translated at average monthly rates. Any currency translation differences arising during consolidation of Group companies are recognized in equity.
Hyperinflation
Argentina (since 2018) and Türkiye (since 2022) are classified as hyperinflationary economies in accordance with the guidelines of IAS 29 “Financial Reporting in Hyperinflationary Economies”. Accordingly, non-monetary assets and liabilities and the corresponding expenses and income in these countries are not reported at historical cost but are presented adjusted for inflation. In Argentina, the Group uses a combination of the wholesale index IPIM (Índice de precios internos al por mayor) and the consumer price index IPC (Índice de precios al consumidor). The index applied stood at 98,664.2 as of the balance sheet date (December 31, 2023: 37,078.3/January 1, 2023: 14,227.3). In Turkey, the Consumer Price Index (CPI) published by the Turkish Statistical Institute is applied. The index applied stood at 2,684.55 as of the balance sheet date (December 31, 2023: 1,859.4/January 1, 2023: 1,128.5). In accordance with the provisions of IAS 21 “The Effects of Changes in Foreign Exchange Rates” for financial statements in non-hyperinflationary reporting currencies, the prior-year amounts have not been restated.
The respective loss from the net position of the monetary items is recognized within other operating expenses and reported separately as a loss from hyperinflation accounting (see Note (14) “Other operating expenses”).
After adjusting the amounts for inflation, the balance sheet items and income and expenses are translated into the reporting currency, the euro, at the closing rate in accordance with IAS 21.42.
The exchange rates of the most significant currencies in these consolidated financial statements were as follows:
Exchange rates of most significant currencies
|
|
Average rate |
|
Closing rate |
||||
|---|---|---|---|---|---|---|---|---|
€ 1 = |
|
2024 |
|
2023 |
|
Dec. 31, 2024 |
|
Dec. 31, 2023 |
Chinese renminbi (CNY) |
|
7,798 |
|
7,667 |
|
7.622 |
|
7,854 |
Japanese yen (JPY) |
|
163,746 |
|
151,913 |
|
162,599 |
|
156,462 |
Swiss franc (CHF) |
|
0.952 |
|
0.972 |
|
0.941 |
|
0.931 |
South Korean won (KRW) |
|
1,474.959 |
|
1,412.674 |
|
1,533.769 |
|
1,428.798 |
Taiwan dollar (TWD) |
|
34.740 |
|
33.695 |
|
34.141 |
|
33.845 |
U.S. dollar (USD) |
|
1.082 |
|
1.082 |
|
1.041 |
|
1.107 |