1 – Basis of Presentation

The Consolidated Financial Statements of the BASF Group for the year ending December 31, 2021, were prepared in accordance with the International Financial Reporting Standards (IFRS) in effect as of the balance sheet date. The Consolidated Half-Year Financial Statements as of June 30, 2022, have been prepared – in line with the rules of International Accounting Standard 34 – in abbreviated form and continuing the same accounting policies. They are written in German and translated into English. All amounts, including the figures for previous years, are given in million euros unless otherwise indicated. Due to rounding, individual figures in this report may not add up to the totals shown and percentages may not correspond exactly to the figures shown.

The Condensed Consolidated Half-Year Financial Statements and the Consolidated Interim Management’s Report have not been audited, nor have they undergone an auditor’s review.

Accounting policies applied for the first time in 2022

Standard/interpretation

Name of standard/interpretation or amendments

Date of publication

Date of endorse­ment by the E.U.

Amendments to IFRS 3

Business Combinations (Amendment to References to the Conceptual Framework)

May 14, 2020

June 28, 2021

Amendments to IAS 16

Property, Plant and Equipment (Proceeds before Intended Use)

May 14, 2020

June 28, 2021

Amendments to IAS 37

Provisions, Contingent Liabilities and Contingent Assets (Onerous Contracts, Settlement Costs from Contracts)

May 14, 2020

June 28, 2021

Annual improvements to IFRS 2018–2020

Amendments to
IFRS 1 (Subsidiary as a First-Time Adopter)
IFRS 9 (Fees in the “10% Test” Regarding Derecognition of Financial Liabilities)
IFRS 16 (Lease Incentives)
IAS 41 (Taxation in Fair Value Measurements)

May 14, 2020

June 28, 2021

These amendments had no material effect on the Consolidated Financial Statements of BASF SE.

IFRSs and IFRICs not yet to be considered but already endorsed by the E.U.

Standard/interpretation

Name of standard/interpretation or amendments

Date of publication

Date of endorsement by the E.U.

Mandatory date of initial application

Introduction of IFRS 17

Insurance Contracts (including amendments to the standard)

May 18, 2017

November 19, 2021

January 1, 2023

Amendments to IFRS 17

 

June 25, 2020

 

 

Amendments to IAS 8

Accounting Policies, Changes in Accounting Estimates and Errors (Definition of Changes in Accounting Policies and Accounting Estimates)

February 12, 2021

March 2, 2022

January 1, 2023

Amendments to IAS 1 and IFRS Practice Statement 2

Presentation of Financial Statements and Making Materiality Judgements (Presentation of Key Accounting Policies)

February 12, 2021

March 2, 2022

January 1, 2023

None of these amendments are likely to have a material impact on BASF’s reporting. BASF does not plan on early adoption of these amendments.

Accounting policies issued but not yet endorsed by the European Union

Standard/interpretation

Name of standard/interpretation or amendments

Date of publication

Date of initial application

Amendments to IAS 1

Presentation of Financial Statements (Classification of Liabilities as Current or Noncurrent) (including Deferral of Effective Date)

January 23, 2020/
(July 15, 2020)

January 1, 2023

Amendments to IAS 12

Income Taxes (Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction)

May 7, 2021

January 1, 2023

Amendments to IFRS 17

Insurance Contracts (Initial Application of IFRS 17 and IFRS 9 – Comparative Information)

December 9, 2021

January 1, 2023

These amendments are unlikely to have a material impact on BASF’s reporting.

The following exchange rates were used for the translation of major currencies in the Group:

Selected exchange rates (EUR 1 equals)

 

Closing rates

Average rates H1

 

June 30, 2022

December 31, 2021

2022

2021

Brazil (BRL)

5.42

6.31

5.56

6.49

China (CNY)

6.96

7.19

7.08

7.80

United Kingdom (GBP)

0.86

0.84

0.84

0.87

Japan (JPY)

141.54

130.38

134.31

129.87

Malaysia (MYR)

4.58

4.72

4.67

4.94

Mexico (MXN)

20.96

23.14

22.17

24.33

Norway (NOK)

10.35

9.99

9.98

10.18

Russian Federation (RUB)

56.52

85.30

85.21

89.55

Switzerland (CHF)

1.00

1.03

1.03

1.09

South Korea (KRW)

1,351.60

1,346.38

1,347.84

1,347.54

United States (USD)

1.04

1.13

1.09

1.21

BASF decided in April to wind down all the company’s business activities in Russia and Belarus, with the exception of business to support food production, as of July 10, 2022. The effects of this decision and the situation in Ukraine were analyzed extensively in the preparation of the financial statements. In particular, an impairment test was performed for the assets in the countries concerned. This led to impairments totaling €51 million on property, plant and equipment, inventories, trade accounts receivable, other receivables and miscellaneous assets, and cash and cash equivalents. The affected property, plant and equipment were fully impaired. In addition, provisions of €27 million were recognized for obligations to customers, suppliers and employees.

An impairment test was performed for the shareholding in Winters­hall Dea as of June 30, 2022. This did not reveal any need for adjustment above and beyond the impairments recognized by Wintershall Dea in the first quarter.