Other

Contingent liabilities

Contingent liabilities are, on the one hand, possible obligations arising from past events whose existence is confirmed only by the occurrence or non-occurrence of uncertain future events that are not entirely under the company’s control. On the other hand, contingent liabilities represent current obligations arising from past events for which, however, an outflow of economic resources is not considered probable or whose amount cannot be determined with sufficient reliability. According to IAS 37, such liabilities are not recognised in the balance sheet but disclosed in the notes. Contingent liabilities are determined on the basis of the principles applying to the measurement of provisions.

Accounting for derivative financial instruments and hedge accounting

Derivative financial instruments are exclusively utilised to reduce risks. They are used in accordance with the respective group guideline.

In accordance with IAS 39, all derivative financial instruments are recognised at fair value and shown under other financial and non-financial assets or other financial and non-financial liabilities.

Derivative financial instruments are measured on the basis of interbank terms and conditions, possibly including the credit margin or stock exchange price applicable to METRO GROUP. Where no stock exchange prices are used, the fair value is determined by means of recognised financial models.

In the case of an effective hedge accounting transaction (hedge accounting) pursuant to IAS 39, fair value changes of derivatives designated as fair value hedges and the underlying transactions are reported in profit or loss. In cash flow hedges, the effective portion of the fair value change of the derivative is recognised in comprehensive income outside of profit or loss. A transfer to the income statement is effected only when the underlying transaction is realised. The ineffective portion of the change in the value of the hedging instrument is immediately reported in profit or loss.

Supplier compensation

Depending on the underlying circumstances, supplier compensation is recognised as supplier discounts, reimbursement or payment for services rendered. Supplier compensation is accrued at closing date insofar as it has been contractually agreed and is likely to be realised. Accruals relating to supplier compensation tied to certain calendar year targets are based on projections.

Summary of selected measurement methods

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Item

Measurement method

Assets

 

Goodwill

At cost (subsequent measurement: impairment test)

Other intangible assets

 

Acquired other intangible assets

At (Amortised) cost

Internally generated intangible assets

At development costs (direct costs and directly attributable overhead)

Property, plant and equipment

At (Amortised) cost

Investment properties

At (Amortised) cost

Financial assets

 

“Loans and receivables”

At (Amortised) cost

“Held to maturity”

At (Amortised) cost

“At fair value through profit or loss” (“held for trading”)

At fair value through profit or loss

“Available for sale”

At fair value recognised in equity

Inventories

Lower of cost and net realisable value

Trade receivables

At (Amortised) cost

Cash and cash equivalents

At nominal value

Assets held for sale

Lower of carrying amount and fair value less costs to sell

Liabilities

 

Provisions

 

Pension provisions

Projected unit credit method

Other provisions

At discounted settlement value (with highest probability of occurrence)

Borrowings

 

“At fair value through profit or loss” (“held for trading”)

At fair value through profit or loss

“Other financial liabilities”

At (Amortised) cost

Other financial and non-financial liabilities

At settlement value or fair value

Trade liabilities

At (Amortised) cost