11 – Noncurrent Assets

Development of intangible assets and property, plant and equipment H1 (Million €)

 

Intangible assets

Property, plant and equipment

 

2022

2021

2022

2021

Cost

 

 

 

 

As of January 1

17,802

17,241

71,030

66,015

Additions

35

28

1,676

1,348

Disposals

–194

–107

–563

–672

Transfers

2

4

–2

–4

Currency effects

723

297

2,201

909

As of June 30

18,367

17,463

74,342

67,596

 

 

 

 

 

Accumulated depreciation and amortization

 

 

 

 

As of January 1

4,303

4,096

49,477

46,368

Additions

327

306

1,643

1,442

Disposals

–191

–81

–506

–595

Transfers

9

–3

Currency effects

156

65

1,475

574

As of June 30

4,595

4,395

52,089

47,786

Net carrying amount as of June 30

13,772

13,068

22,253

19,810

Additions to property, plant and equipment in the first half of 2022 were mainly due to investment projects such as the establishment of a new Verbund site in Zhanjiang, China, and the construction and expansion of the ethylene oxide and polyethylene oxide production plants in Antwerp, Belgium, and in Ludwigshafen, Germany. Furthermore, they included construction and expansion projects as well as modernization measures, primarily at the sites in Ludwigshafen, Germany; Antwerp, Belgium; Shanghai, China; Geismar, Louisiana; and Freeport, Texas.

In addition to regular depreciation, accumulated depreciation on property, plant and equipment included, in particular, impairments in connection with the agreed divestiture of the De Meern site in the Netherlands.

Currency effects in the first half of 2022 resulted largely from appreciation of the U.S. dollar against the euro.

BASF’s market capitalization declined by 34% in the first half of the year to €37,376 million. Equity increased to €46,373 million in the same period, mainly due to higher other comprehensive income.

BASF therefore reviewed whether a need for impairment could be derived from this, especially of goodwill. Despite the significant decline in market capitalization, the business results of almost all goodwill-bearing cash-generating units have developed in line with or better than assumed for the impairment tests as of December 31, 2021. We also have no indications of a significant deterioration in future business developments compared with previous assumptions. One exception is business with the automotive industry, where the weak phase is lasting longer than expected. However, as this is primarily due to supply chain disruptions, we expect the recovery to be merely delayed.

The discount rate used for the impairment tests rose only insignificantly despite an increase in the risk-free interest rate due to changes in other relevant market parameters. Furthermore, the carrying amounts of the goodwill-bearing cash-generating units have not changed significantly since the end of the year.

On this basis, there were no indications of goodwill impairment.

Development of investments accounted for using the equity method H1 (Million €)

 

Integral

Non-integral

Total

 

2022

2021

2022

2021

2022

2021

Carrying amounts as of January 1

2,540

1,878

9,843

10,874

12,383

12,752

Proportional income after taxes and other adjustments to income and expenses

233

321

–342

73

–109

394

Proportional changes in other comprehensive income

83

40

1,486

29

1,569

69

Total comprehensive income

316

361

1,144

102

1,460

463

Changes in the scope of consolidation

Additions

382

12

382

12

Disposals

–2

–6

–2

–6

Transfers

–372

–116

–90

–488

–462

–604

Carrying amounts as of June 30

2,865

2,129

10,897

10,488

13,762

12,617

Proportional income after taxes and other adjustments to income and expenses declined by a total of €503 million, mainly due to the lower earnings of the non-integral shareholding in Wintershall Dea AG, Kassel/Hamburg, Germany, as a result of the impairments recognized, and the decline in earnings at Lucura Versicherungs AG, Ludwigshafen, Germany, and BASF-YPC Company Ltd., Nanjing, China.

Proportional changes of other comprehensive income included income and expense recognized directly in equity and related primarily to translation-related changes in the value of the shareholding in Wintershall Dea AG.

Additions to integral investments accounted for using the equity method mainly related to the shareholding in HKZ Investor Holding B.V., Arnhem, Netherlands.

Disposals in the first half of 2022 included a capital decrease at Yara Freeport LLC, Wilmington, Delaware.

Transfers in the first half of 2022 amounted to –€462 million and mainly included dividend distributions, particularly from Wintershall Dea AG, BASF-YPC Company Ltd., and Markor Meiou Chemical (Xinjiang) Co., Ltd., Shanghai, China.

Other financial assets (Million €)

 

June 30, 2022

Dec. 31, 2021

June 30, 2021

Other shareholdings

524

514

478

Long-term securities

60

61

55

Other financial assets

585

575

533