3. Consolidation, accounting and valuation principles
3.1 Basis for preparation of the financial statements
The condensed interim consolidated financial statements for the period from 1 January to 30 June 2019 were prepared in compliance with the rules of IAS 34.
The IFRS requirements that apply in the European Union have been met in full.
The condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of 31 December 2018.
3.2 Principal accounting and valuation methods
The accounting and valuation methods used for the preparation of the condensed interim consolidated financial statements correspond to the methods used in the preparation of the consolidated financial statements as of 31 December 2018.
The company started applying the following new standards on 1 January 2019:
- Amendments to IAS 19 Plan Amendment, Curtailment or Settlement
- Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures
- IFRS 16 Leases
- Amendments to IFRS 9 Prepayment Features with Negative Compensation
- IFRIC 23 Accounting for Uncertainties in Income Taxes
- Improvements to IFRS 2015–2017 Cycle
IFRS 16 entails major amendments to reporting standards for lessees. In general, all leases will be recognised as rights of use for accounting purposes as of the time of initial application.
The HHLA Group shall take into account the modified retrospective approach during the initial application of IFRS 16. With this method, the comparative prior-year figures are not adjusted; changeover effects must therefore be recognised as adjustments to revenue reserves as of 1 January 2019. As part of the modified retrospective approach, an average incremental borrowing rate of 2.5 % as of 1 January 2019 has been used to calculate the lease liability. Within Germany, the incremental borrowing rate ranges between 0.4 % and 2.2 %. As a result of the materiality of longer-term lease agreements, the average German incremental borrowing rate is 2.0 %. Outside of Germany, this value ranges between 2.1 % and 12.7 %. As a result of the higher proportion of countries with lower financing costs, the average incremental borrowing rate outside of Germany is 3.5 %.
In respect of many of the contracts, HHLA recognises the usage rights for leased assets under property, plant and equipment in the amount of the corresponding present value of lease liabilities at first-time application, meaning that no equity effects will arise at this time. Due to their material importance, usage rights for rental agreements for space at the Port of Hamburg, which were previously recognised as operating leases, will be recognised at their carrying amounts, as though IFRS 16 had applied since the start of the lease. This results in significant changeover effects as of 1 January 2019, which are shown as adjustments to revenue reserves.
As a lessee, HHLA takes the opportunity not to recognise usage rights and lease liabilities for short-term leases whose term is a maximum of twelve months, or leases where the underlying asset is of low value. For these leases, lease payments are recorded as expenses instead.
The following table shows the reconciliation of carrying amounts from IAS 17 to IFRS 16:
in € thousand |
Carrying amounts according as at 31 December 2018 |
Reclassifications of finance leases |
Adjustments due to IFRS 16 (modified retroactively, Option a) |
Adjustments due to IFRS 16 (modified retroactively, Option b) |
Carrying amounts according as at 1 January 2019 |
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Assets |
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Property, plant and equipment |
|
|
|
|
|
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Land/buildings |
453,200 |
- 91,285 |
|
|
361,915 |
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Rights of use - Land/buildings |
0 |
91,285 |
341,384 |
161,021 |
593,690 |
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Technical equipment and machinery |
306,095 |
- 14,596 |
|
|
291,499 |
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Rights of use - Technical equipment and machinery |
0 |
14,596 |
|
208 |
14,804 |
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Other plant, operating and office equipment |
219,464 |
- 34,525 |
|
|
184,939 |
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Rights of use - Other plant, operating and office equipment |
0 |
34,525 |
|
49,532 |
84,057 |
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Payments on account and plants under construction |
81,504 |
|
|
- 9,267 |
72,237 |
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Deferred taxes |
82,126 |
|
28,356 |
|
110,482 |
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Equity and liabilities |
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Equity |
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|
|
|
|
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Retained earnings of the parent company |
512,369 |
|
- 55,252 |
1,003 |
458,120 |
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Non-controlling interests |
- 8,812 |
|
- 4,250 |
|
- 13,062 |
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Other non-current provisions |
110,138 |
|
|
- 5,920 |
104,218 |
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Other non-current provisions from leases |
5,920 |
|
|
- 5,920 |
0 |
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Non-current liabilities to related parties |
104,999 |
|
408,193 |
|
513,192 |
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Liabilities from leases |
2,796 |
|
97,120 |
|
99,916 |
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Liabilities from leases |
102,203 |
|
311,073 |
|
413,276 |
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Non-current financial liabilities |
429,886 |
|
|
187,170 |
617,056 |
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Liabilities from leases |
10,839 |
|
|
56,414 |
67,253 |
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Liabilities from leases |
22,946 |
|
|
130,756 |
153,702 |
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Other current provisions |
28,045 |
|
- 1,371 |
- 371 |
26,303 |
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Other current provisions from leases |
1,742 |
|
- 1,371 |
- 371 |
0 |
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Current liabilities to related parties |
7,940 |
|
22,420 |
|
30,360 |
|||||||||
Liabilities from leases |
471 |
|
22,420 |
|
22,891 |
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Current financial liabilities |
82,684 |
|
|
19,612 |
102,296 |
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Liabilities from leases |
5,124 |
|
|
19,612 |
24,736 |
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The reconciliation of off-balance sheet lease obligations as of 31 December 2018 with lease obligations recorded on the balance sheet as of 1 January 2019 is as follows:
in € thousand |
|
|
Minimum lease payments due to non-cancellable operating leases as of December 31, 2018 |
1,015,936 |
|
Minimum lease payments on finance lease liabilities as of 31 December 2018 |
271,275 |
|
Less application facilitation for short-term leases |
- 8,214 |
|
Less application facilitation for leases of low value assets |
- 209 |
|
Less conditional rental payments |
- 112,997 |
|
Less other |
- 34,535 |
|
Gross lease liabilities under IFRS 16 as of January 1, 2019 |
1,131,256 |
|
Less interest portion included in lease liabilities |
- 349,482 |
|
Lease liabilities according to IFRS 16 as of January 1, 2019 |
781,774 |
|
Less present value of liabilities from finance leases according to IAS 17 as of December 31, 2018 |
- 144,379 |
|
Additional lease liabilities due to the first-time adoption of IFRS 16 as of January 1, 2019 |
637,395 |
No effects on the consolidated financial statements arise from the application of any other standards.
The following new amendments to standards can be applied on a voluntary basis for the financial year under review. They have not been applied by HHLA:
- Amendments to IAS 1 and IAS 8 Definition of Materiality
- Amendments to IFRS 3 Definition of a Business
- Amendments to References to the Conceptual Framework in IFRS Standards
3.3 Changes in the group of consolidated companies
The company TIP Žilina, s.r.o., Dunajska Streda, Slovakia, was included in the HHLA group of consolidated companies for the first time in the first quarter of 2019. This company was founded in 2017 and began operating in the second quarter of 2019.
With the participation and shareholder agreement of 20 December 2018, HHLA acquired 25.1 % of the shares in Spherie UG (limited liability), Hamburg, as of the transfer date on 1 January 2019. The object of the company is the development, production and distribution of aerial systems exclusively for the capture of 360º sensor data, as well as services connected with the aerial systems to capture 360º sensor data. The company was included in HHLA’s consolidated financial statements in the first quarter of 2019 using the equity method and is assigned to the Logistics segment.
No other changes in the group of consolidated companies took place during the reporting period.