20 – Other Comprehensive Income

Accounting policies

The expenses and income shown in other comprehensive income are divided into two categories: Items that will be recognized in the income statement in the future (known as “recycling”) and items that will not be reclassified to the income statement in the future. The first category includes translation adjustments, the measurement of certain securities classified as debt instruments, and changes in the fair value of derivatives held to hedge future cash flows. Items in other comprehensive income that will not be reclassified to the income statement at a future date include effects from the remeasurement of defined benefit plans.

Remeasurement of defined benefit plans

Changes in the value of plan assets reduced other comprehensive income by €393 million in 2019, and by €745 million in the previous year (after taxes).

BASF and LetterOne completed the merger of Wintershall and DEA on April 30, 2019. In this connection, €140 million from the remeasurement of defined benefit plans was reclassified from other comprehensive income to retained earnings.

Unrealized gains/losses from currency translation

Translation adjustments decreased by €1,264 million year on year. Of that amount, €834 million after taxes related to reclassification of realized gains/losses from divestiture to the income statement (recycling associated with deconsolidation of Wintershall companies). The remaining change resulted primarily from the appreciation of the Russian ruble and the U.S. dollar relative to the euro.

Cash flow hedges

Net losses previously recognized in equity were reclassified to the income statement (recycling) in the amount of €36 million due to divestiture.

Hedging future cash flows at shareholdings accounted for using the equity method led to unrealized losses of minus €12 million in 2019 and minus €11 million in 2018.