Accounting Policy
The transactions with non-controlling interests are accounted for as equity transactions. For purchases of non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of the net assets of the subsidiary is deducted from equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
Significant Accounting Estimates and Judgments
Consolidation of the Synoptik Group
The Company’s ownership interest in the Synoptik Group is 63.29%. The agreement between the Company and the partner stipulates that the partner has certain affirmative votes in order to protect the variable returns of their investment. Resulting from contractual arrangements between the Company and the partner on key operational, procurement and organizational activities, the Company has the ability to execute power over the relevant activities of Synoptik, which directly affects Synoptik’s returns. Following this assessment, the Company concluded that it has control and the Synoptik Group is consolidated. At each reporting date this assessment is reconsidered.
The movements in Non-Controlling Interest can be specified as follows:
in thousands of EUR | 2019 | 2018 |
|---|---|---|
At 31 December | 90,011 | 81,480 |
Adjustment on initial application of IFRS 16 | - 1,627 | - |
Adjusted at 1 January | 88,384 | 81,480 |
Result for the year | 16,888 | 21,018 |
Dividends paid | - 16,681 | - 16,021 |
Acquisition of non-controlling interest | - 33 | 2,704 |
Remeasurement of post-employment benefit obligation | - 2,955 | 758 |
Cash flow hedge reserve | 7 | 59 |
Hedge results transferred to the carrying value of inventory purchased during the year | - 179 | - 262 |
Currency translation differences | 1,678 | 275 |
At 31 December | 87,109 | 90,011 |
Acquisition of non-controlling interest in 2019 and 2018 mainly related to the purchase of the non-controlling interest in the United Kingdom.
The financial information for the Synoptik Group (non-controlling interest of 36.71%) is as follows:
in thousands of EUR | 31 December 2019 | 31 December 2018 |
|---|---|---|
Summarized Balance Sheet: | ||
Non-current assets | 181,891 | 97,734 |
Current assets | 117,615 | 111,064 |
Equity | 152,261 | 142,946 |
Non-current liabilities | 69,332 | 4,828 |
Current liabilities | 77,913 | 61,024 |
The accumulated non-controlling interest for the Synoptik Group amounts to €55,895 (2018: €52,475).
The financial information for operations in Switzerland (non-controlling interest of 21%) is as follows:
in thousands of EUR | 31 December 2019 | 31 December 2018 |
|---|---|---|
Summarized Balance Sheet: | ||
Non-current assets | 310,592 | 120,332 |
Current assets | 36,632 | 24,922 |
Equity | 46,211 | 66,736 |
Non-current liabilities | 244,554 | 44,325 |
Current liabilities | 56,459 | 34,193 |
The accumulated non-controlling interest in Switzerland amounts to €9,778 (2018: €14,157).
The financial information for operations in Mexico (non-controlling interest of 30%) is as follows:
in thousands of EUR | 31 December 2019 | 31 December 2018 |
|---|---|---|
Summarized Balance Sheet: | ||
Non-current assets | 98,210 | 65,067 |
Current assets | 64,954 | 51,814 |
Equity | 45,341 | 45,784 |
Non-current liabilities | 62,931 | 39,752 |
Current liabilities | 54,892 | 31,345 |
The accumulated non-controlling interest in Mexico amounts to €13,856 (2018: €13,891).
Following IFRS 16 implementation there was an increase in assets and liabilities of the above operations.