25. Supplementary Information on Financial Instruments

25.1 Accounting policies

Financial assets and financial liabilities are recognized in the consolidated balance sheet when the BASF Group becomes a party to a financial instrument. Financial assets are derecognized when BASF no longer has a contractual right to the cash flows from the financial asset or when the financial asset is transferred together with all material risks and rewards of ownership or the significant risks and rewards are neither transferred nor retained and BASF does not have control of the financial asset after it has been transferred. For example, receivables are derecognized when they are definitively found to be uncollectible such as in the event of concluded insolvency proceedings. Financial liabilities are derecognized when the contractual obligations expire, are discharged or cancelled. Regular-way purchases and sales of financial instruments are accounted for using the settlement date; in precious metal trading, the trade date is used.

The fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If pricing on an active market is available, for example in the form of exchange prices, these are used as the basis for the measurement. Otherwise, the measurement is based on either internal measurement models using current market parameters or external measurements, for example, from banks. These internal measurements rely predominantly on the net present value method and option pricing models. These models incorporate, for example, expected future cash flows as well as discount factors adjusted for term and, potentially, risk. Depending on the availability of market parameters, BASF assigns financial instruments’ market values one of the three levels of the fair value hierarchy pursuant to IFRS 13. Reassignment to a different level during a fiscal year is only carried out if the availability of observable market parameters for identical or similar items changes.

If the level 3 fair values calculated at the time of initial recognition using a valuation model, differ from the transaction price, the differences are deferred and reported in the balance sheet together with the positive or negative fair value of the respective financial instrument according to the valuation model. The differences are generally amortized over the terms of the contracts using the straight-line method.

The classification and measurement of financial assets is based on the one hand on the cash flow condition (the “solely payments of principal and interest” criterion), that is, the contractual cash flow characteristics of an individual financial asset. On the other hand, it also depends on the business model used for managing financial asset portfolios. Based on these two criteria, BASF uses the following measurement categories for financial assets:

Financial assets measured at fair value through profit or loss include all financial assets whose cash flows are not solely payments of principal and interest in accordance with the cash flow condition established in IFRS 9. Furthermore, this measurement category includes financial assets whose business model does not consist of collecting at least a portion of the contractually agreed cash flows expected over the term by holding them. At BASF, derivatives, for example, are allocated to this measurement category. In general, BASF does not exercise the fair value option in IFRS 9, which permits the allocation of financial instruments not to be measured at fair value through profit or loss on the basis of the cash flow condition or the business model criterion to the above category under certain circumstances. These instruments are initially measured at fair value, which typically equals the transaction price.

In 2024, BASF concluded a climate protection agreement with the Federal Republic of Germany to fund a heat pump at the Ludwigshafen site. This agreement is a contract for difference and is measured as a derivative at fair value. The effects on earnings from measurement of the contract are initially deferred. When the heat pump goes into operation, the deferred subsidy is recognized in profit or loss in line with the utilized amount of the funding.

Financial assets measured at amortized cost include all assets with contractual terms that give rise to cash flows on specific dates, provided these cash flows are solely payments of principal and interest on the principal amount outstanding in accordance with the cash flow condition in IFRS 9, to the extent that the asset is held with the intention of collecting the expected contractual cash flows over its term. At BASF, this measurement category includes trade accounts receivable, as well as receivables reported under other receivables and miscellaneous assets and certain securities.

Initial measurement of these assets is generally at fair value plus directly attributable transaction costs. The fair value usually corresponds to the transaction price at the time of acquisition or, in the case of trade accounts receivable, to the transaction price pursuant to IFRS 15. Subsequent measurement effects are recognized in income using the effective interest method.

Impairments are recognized for expected credit losses at both initial and subsequent measurement, even before the occurrence of any default event. Counterparties are generally considered to default when they become insolvent, become a debtor in a creditor protection program or are in a finance-related legal dispute with BASF, or more than half of BASF’s receivables portfolio with them is more than 90 days overdue. In these cases, individual impairments are recognized for the financial assets measured at amortized cost that are then considered to be credit impaired.

The extent of expected credit losses is determined based on the credit risk of a financial asset, as well as any changes to this credit risk: If the credit risk of a financial asset has increased significantly since initial recognition, expected credit losses are generally recognized over the lifetime of the asset. If, however, the credit risk has not increased significantly in this period, impairments are generally only recognized as 12-month expected credit losses. By contrast, under the simplified approach for determining expected credit losses permitted by IFRS 9, impairments for receivables such as lease receivables and trade accounts receivable always cover the lifetime expected credit losses of the receivable concerned.

At BASF, the credit risk of a financial asset is assessed using both internal information and external rating information on the respective counterparty. A significant increase in the counterparty’s credit risk is assumed if its rating is lowered by a certain number of notches. It is generally assumed that the credit risk for a counterparty with a high credit rating will not have increased significantly.

Regional and, in certain circumstances, industry-specific factors and expectations are taken into account when assessing the extent of impairment as part of the calculation of expected credit losses and individual impairments. In addition, BASF uses internal and external ratings and the assessments of debt collection agencies and credit insurers, when available. Individual impairments are also based on experience relating to customer solvency and customer-specific risks. Bank guarantees and letters of credit are used to an immaterial extent. Expected credit losses and individual impairments are only calculated for receivables to the extent they are not covered by collateral.

A decrease in impairment due, for example, to a reduction in the credit risk of a counterparty or an objective event occurring after the impairment is recorded in profit or loss. Reversals of impairments may not exceed amortized cost less any expected future credit losses.

Financial assets measured at fair value through other comprehensive income include all assets with contractual terms that give rise to cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding, in accordance with the cash flow condition in IFRS 9. Furthermore, the assets in this measurement category may not just be held with the intention of collecting the expected contractual cash flows over their term, but also generating cash flows from their sale. At BASF, trade accounts receivable that are available for sale as part of a factoring agreement are allocated to this category. Additionally, certain securities that are reported as other financial assets or marketable securities are allocated to this category. BASF does not exercise the option to subsequently measure equity instruments through other comprehensive income. Assets measured at fair value through other comprehensive income are initially measured at fair value including directly attributable transaction costs. At initial recognition, the fair value usually corresponds to the transaction price of the receivables and securities allocated to this category . Subsequent measurement is likewise at fair value. Changes in the fair value are recognized in other comprehensive income and reclassified to the statement of income when the asset is disposed of. Impairments on financial assets measured at fair value through other comprehensive income are calculated in the same way as impairments on financial assets measured at amortized cost and recognized in profit or loss.

The following measurement categories are used for financial liabilities:

Financial liabilities measured at amortized cost generally include all financial liabilities, provided these do not represent derivatives. At initial recognition, they are generally measured at fair value, taking into account directly attributable transaction costs. At initial recognition, the fair value usually corresponds to the value of the consideration received. Subsequent measurement is recognized in profit or loss at amortized cost using the effective interest method. At BASF, for example, bonds and liabilities to banks reported under financial indebtedness are measured at amortized cost.

BASF has concluded supplier finance arrangements under which suppliers are entitled to receive invoice amounts prior to the original due date. Payment to the supplier is made by one of several participating banks with a discount. BASF pays the full invoice amount to the banks on the original due date. As the original payment obligations remain in place and there is no change in the main payment terms, the obligations continue to be reported under trade accounts payable.

Financial liabilities measured at fair value through profit or loss contain derivative financial liabilities. At initial recognition, these are measured at fair value, which generally equates to the transaction price. Fair value is also applied as a measurement basis for these liabilities in subsequent measurement. The option to subsequently measure non-derivative financial liabilities at fair value is not exercised. Derivative financial instruments can be embedded within other contracts, creating a hybrid financial instrument. If IFRS policies require separation, the embedded derivative is accounted for separately from its host contract and measured at fair value. If IFRS 9 does not provide for separation, the hybrid instrument is accounted for at fair value in its entirety.

Financial guarantees of the BASF Group are contracts that require compensation payments to be made to the guarantee holder if a debtor fails to make payment when due under the terms of a transaction entered into with the holder of the guarantee. Financial guarantees issued by BASF are measured at fair value upon initial recognition. In subsequent periods, these financial guarantees are carried at the higher of amortized cost or the expected credit losses as of the reporting date.

In cash flow hedges, future cash flows and the related income and expenses are hedged against the risk of changes in value. To this end, future underlying transactions and the corresponding hedging instruments are designated in a cash flow hedge accounting relationship for accounting purposes. The effective portion of the change in fair value of the hedging instrument, which often meets the definition of a derivative, and the cost of hedging are recognized directly in equity under other comprehensive income over the term of the hedge, taking deferred taxes into account. The ineffective portion is recognized immediately in the income statement. In the case of future transactions that lead to recognition of a nonfinancial asset or a nonfinancial liability, the cumulative fair value changes of the hedge in equity are generally charged against the cost of the hedged item on its initial recognition. For hedges based on financial assets, financial liabilities or future transactions, cumulative fair value changes of the hedges are transferred from equity to the income statement in the reporting period in which the hedged item is recognized in the income statement. The maturity of the hedging instrument is aligned with the effective date of the future transaction.

When fair value hedge accounting is used, the asset or liability recognized is hedged against the risk of a change in fair value. The hedging instruments used, which often take the form of a derivative, are measured at fair value and changes in fair value are recognized in the statement of income. The carrying amounts of the assets or liabilities designated as the underlying transaction are also measured at fair value through the statement of income.

25.2 Financial risks

Market risks

Foreign currency risks: Changes in exchange rates could lead to losses in the value of financial instruments and adverse changes in future cash flows from planned transactions. Foreign currency risks from financial instruments result from the translation at the closing rate of financial receivables, loans, securities, cash and financial liabilities into the functional currency of the respective Group company. Foreign currency contracts in various currencies are used to hedge foreign exchange risks from non-derivative financial instruments and planned transactions.

The foreign currency risk exposure corresponds to the net amount of the nominal volume of the primary and the derivative financial instruments that are exposed to currency risks. Long and short positions in the same currency are offset against each other. Primary and derivative financial instruments are generally taken into account in currency risk management. Planned purchasing and sales transactions are usually no longer determined and included in the currency exposure. In the previous year, these transactions were included in the calculation of currency exposure.

As of December 31, 2024 and December 31, 2023, there was no significant currency exposure as all material currency risks were hedged. Appreciation or depreciation of the respective functional currency would not have had a significant impact on BASF’s income before income taxes or equity.

Interest rate risks: Interest rate risks arise from changes in prevailing market interest rates, which can lead to changes in the fair value of fixed-rate instruments and in interest payments for variable-rate instruments. Interest rate swaps and combined interest rate and currency derivatives are used in individual cases to hedge these risks. The derivatives are presented in Note 25.5. Interest rate risks are relevant to BASF’s financing activities but are not of material significance to BASF’s operating activities.

The variable interest risk exposure, which also includes fixed rate bonds maturing in the following year, amounted to –€3,377 million as of December 31, 2024 (previous year: –€427 million). An increase in all relevant interest rates by one half of a percentage point would have lowered income before income taxes by €10 million as of December 31, 2024. An increase in all relevant interest rates by one percentage point would have lowered income before income taxes by €19 million as of the same date. An increase in all relevant interest rates by one half of a percentage point would have raised income before income taxes by €2 million as of December 31, 2023 (an increase of one percentage point would have raised income before income taxes by €3 million). Because no interest derivatives were designated in hedge accounting relationships as of December 31, 2024, a change in interest rates would not have had an effect on shareholders’ equity. There were also no interest derivatives designated in hedge accounting relationships as of December 31, 2023.

Commodity price risks: Some of BASF’s divisions are exposed to strong fluctuations in raw materials prices. These result primarily from raw materials (for example, naphtha, benzene, natural gas, LPG condensate) as well as from metals. BASF takes the following measures to reduce commodity price risks:

• BASF uses derivatives to hedge the risks of raw materials prices. These are primarily derivatives on natural gas, crude oil, oil products.
• The Catalysts division enters into both short-term and long-term purchase contracts with precious and battery metal producers. It also buys metals on spot markets from various business partners. The price risk from metals purchased to be sold on to third parties, or for use in the production of catalysts and battery materials, is hedged using derivative instruments. This is mainly performed using forward contracts, which are settled by either entering into offsetting contracts or by delivering the metal.
• In the Agricultural Solutions division, the sales prices of products are sometimes pegged to the price of certain agricultural commodities. To hedge the resulting risks, derivatives on agricultural commodities are concluded.

In addition, BASF holds limited unhedged precious metal and oil product positions, which can also include derivatives, for trading on its own account. The value of these positions is exposed to market price volatility and is subject to constant monitoring.

By holding commodity derivatives, precious metal trading positions and unhedged oil product positions, BASF is exposed to price risks. The valuation of commodity derivatives and precious metal trading positions at fair value as well as unhedged oil product positions means that adverse changes in market prices could negatively affect the earnings and equity of BASF.

BASF holds several physical power purchase agreements (PPAs) with terms of up to 25 years. Under the physical PPAs, BASF procures electricity and associated green electricity certificates, known as guarantees of origin (GoOs). If BASF holds PPAs for the purpose of full consumption of the electricity, these fall under the own use exemption and are therefore not recognized as derivatives. Additionally, BASF also holds physical PPAs in the USA and Asia; the electricity from these PPAs cannot be consumed in full due to major deviations between supply profiles and consumption patterns. The electricity forward agreements embedded in them are not eligible for the own use exemption and are recognized as derivatives at fair value through profit or loss. In contrast to electricity, green electricity certificates obtained from physical PPAs recognized as derivatives can be stored and consumed at a later date. Thus, they fall under the own use exemption even if purchased at a fixed price. In the event of adverse changes in energy market prices, valuation of the electricity forward agreements for physical PPAs can lead to negative effects on BASF’s earnings.

Furthermore, BASF holds several virtual PPAs in the United States with initial terms of up to 15 years. The electricity forward agreements embedded in virtual PPAs are recognized separately as derivatives at fair value through profit or loss. In the event of adverse changes in energy market prices, measurement of electricity forward agreements at fair value can lead to negative effects on BASF’s earnings.

BASF performs value-at-risk analyses for commodity derivatives and precious metal trading positions. Value at risk continuously measures the market price risk and quantifies the loss that is not exceeded by a specific confidence level during a defined holding period. BASF bases the value-at-risk calculation on a confidence interval of 95% and a holding period of one day. BASF applies the variance-covariance method to calculate value at risk.

BASF uses value at risk in conjunction with other risk management tools. Besides value at risk, BASF sets volume-based limits as well as exposure and stop-loss limits.

The exposure corresponds to the net amount of all long and short positions of the respective commodity category (for more information on financial risks and BASF’s risk management, see the Opportunities and risks report).

Default and credit risk

Default or credit risks arise due to the fact that customers and debtors may not fulfill their obligations. BASF regularly analyzes the creditworthiness of the counterparties and grants credit limits on the basis of this analysis. Due to the global activities and diversified customer structure of the BASF Group, there is no significant concentration of default risk. The risk of default is mitigated to a limited extent by collateral, in particular bank guarantees and assets. The carrying amount of all receivables, loans and interest-bearing securities plus the nominal value of financial obligations stemming from contingent liabilities not to be recognized represents the maximum default risk for BASF (for more information on credit risks, see Note 17).

In 2024, €37 million was recognized for expected credit losses from financial guarantees issued for the first time (balance as of December 31, 2024: €37 million). The maximum default amount of the financial guarantees issued was €182 million. The earliest possible maturity of the financial guarantees was €170 million for 2025 and €12 million for 2026. In the previous year, no expected credit losses were recognized for financial guarantees issued for reasons of materiality. The maximum default amount in the previous year was €28 million and the earliest possible maturity was €28 million for 2024.

Liquidity risks

BASF promptly recognizes any risks from cash flow fluctuations as part of liquidity planning. BASF has ready access to sufficient liquid funds from the ongoing commercial paper program and confirmed lines of credit from banks.

25.3 Maturity analysis

The interest and principal payments as well as other payments for derivative financial instruments are relevant for the presentation of the maturities of the contractual cash flows from financial liabilities. Future cash flows are not discounted here.

Derivatives are included using their net cash flows, provided they have negative fair values and therefore represent a liability. Derivatives with positive fair values are assets and are therefore not taken into account.

25.4 Classes and categories of financial instruments

For trade accounts receivable, other receivables and miscellaneous assets, cash and cash equivalents, as well as trade accounts payable and other liabilities measured at amortized cost, the carrying amount approximates the fair value.

The electricity forward agreements presented in the previous table are derivatives embedded in virtual and physical PPAs that are not eligible for own use exemption. A change in the key valuation parameters would have affected the level 3 fair values of the fair value hierarchy as follows:

At initial recognition, the fair values of the electricity forward agreements, which were calculated using a valuation model, were higher than the respective transaction price. Development of the differences is presented in the table below.

The changes in carrying amounts were recognized in the income statement as other operating income or other operating expenses.

No reclassifications arose between fair value levels 1, 2 and 3 for financial assets or liabilities recognized at fair value in the reporting period.

The table “Offsetting of derivative assets and liabilities” shows the extent to which assets and liabilities were offset in the balance sheet, as well as potential effects from the offsetting of derivatives subject to a legally enforceable global netting agreement (primarily in the form of an ISDA agreement) or similar agreement. For positive fair values of combined interest rate and currency swaps, the respective counterparties provided cash collaterals in an amount comparable to the outstanding fair values.

Deviations from the derivatives with positive fair values and derivatives with negative fair values reported in other receivables and other liabilities at the end of 2024 and 2023 arose from derivatives not subject to any netting agreements. These are not included in the table above.

In addition to the offsetting of derivatives presented in the table above, trade accounts receivable in 2024 were offset against trade accounts payable and advance payments received on orders, which were included in current other liabilities, provided specific netting agreements with customers existed. As a result, trade accounts receivable were reduced by €1,066 million. The reduction in trade accounts payable was €57 million and the reduction in advance payments received on orders was €1,009 million. Accordingly, the net amount for trade accounts receivable was €10,393 million (gross amount before offsetting: €11,459 million). The resulting net amount for trade accounts payable was €6,923 million (gross amount before offsetting: €6,980 million). The net amount for advance payments received on orders was €727 million (gross amount before offsetting: €1,736 million). In 2023, trade accounts receivable were also offset against trade accounts payable and the advance payments received on orders included in current other liabilities. This reduced trade accounts receivable by €1,029 million. The reduction in trade accounts payable was €72 million and the reduction in advance payments received on orders was €957 million. Accordingly, the net amount for trade accounts receivable was €10,414 million (gross amount before offsetting: €11,443 million). The resulting net amount for trade accounts payable was €6,741 million (gross amount before offsetting: €6,813 million). The net amount for advance payments received on orders was €779 million (gross amount before offsetting: €1,736 million).

The net gains and losses from financial instruments shown in the following table comprise the results of valuations, the amortization of discounts, the recognition and reversal of impairments, results from the translation of foreign currencies as well as interest, dividends and all other effects on the earnings resulting from financial instruments. The line item financial instruments measured at fair value through profit or loss contains only gains and losses from instruments that are not designated as hedging instruments in a hedging relationship in accordance with IFRS 9 (gains and losses from the valuation of securities recognized in equity are shown in development of income and expense recognized in equity attributable to shareholders of BASF SE. For more information, see the statement of changes in equity).

25.5 Derivative financial instruments and hedging relationships

The use of derivative financial instruments

BASF is exposed to foreign currency, interest rate and commodity price risks during the normal course of business. These risks are hedged using derivative instruments as necessary in accordance with a centrally determined strategy. Hedging is employed for existing underlying transactions from the product business, cash investments and financing as well as for planned sales, raw materials purchases and capital measures. Furthermore, hedging may also be used for cash flows from acquisitions and divestitures. The risks from the hedged items and the derivatives are continually monitored. Where derivatives have a positive market value, BASF is exposed to credit risks from derivative transactions in the event of nonperformance of the other party. To minimize the default risk on derivatives with positive market values, transactions are exclusively conducted with creditworthy banks and partners and are subject to predefined credit limits.

To ensure efficient risk management, risk positions are centralized at BASF SE and certain Group companies. The contracting and execution of derivative financial instruments for hedging purposes are conducted according to internal guidelines and subject to strict control mechanisms.

Hedge accounting

BASF is exposed to commodity price risks in the context of procuring naphtha. Some of the planned purchases of naphtha are hedged using options on oil and oil products. The main contractual elements of these items are aligned with the characteristics of the hedged item. Cash flow hedge accounting was employed for a portion of these hedging relationships in 2024 and 2023. As of December 31, 2024, no options were designated as hedging instruments. The average exercise price of the designated options was $684.51 per metric ton in the previous year.

Cash flow hedge accounting continued to be employed to a minor extent for procuring natural gas, which is likewise exposed to commodity price risks. Commodity price-based options as well as swaps serve as hedging instruments, for which contract terms are defined to reflect the risks of the hedged item. No options were designated as hedging instruments as of December 31, 2024. The average hedged exercise price of the designated swaps was €43.86 per MWh. As of December 31, 2023, the average exercise price of the designated options was €72.00 per MWh or $4.02 per mmBtu and €48.31 per MWh for the designated swaps. Cash flows from not yet realized hedging and underlying transactions are generally recognized in profit or loss in 2025.

The change in the options’ time value is recognized separately in equity as costs of transaction-related hedging and, in the year during which the hedged items mature, it is initially derecognized against the carrying amount of the procured assets and recognized in profit or loss when the assets are consumed. In 2024, a decrease in time value of €16 million was recognized as a reduction in equity, and €31 million was initially derecognized against the carrying amount of the inventories procured and then recognized upon consumption in profit or loss. In 2023, a decrease in time value of €63 million was recognized as a reduction in equity, and €64 million was derecognized against the carrying amount of the acquired assets.

Due to planned sales in U.S. dollars, BASF is exposed to foreign currency risks, which were partially hedged with currency options and designated in a cash flow hedge accounting relationship. The hedged transaction – the designated share of expected sales in U.S. dollars – was calculated based on internal thresholds. The exposure from planned sales is no longer determined. In the previous year, the planned exposure was determined. Therefore, no hedging relationships existed for planned sales as of December 31, 2024. The average hedged rate was $1.0863 per euro as of the same date of the previous year. The decrease in the options’ time value component arising in the amount of €9 million in 2024 was recognized separately in equity as the cost of hedging and resulted in a reduction in equity. Due to the maturity of hedged items, accumulated changes in the options’ time values were reclassified as a reduction in earnings in the amount of €11 million. In the previous year, €9 million was recognized as a change in the options’ time value component, thereby reducing equity; and €12 million was reclassified as a reduction in earnings.

BASF SE’s fixed-rate U.S. private placement of $1.25 billion, issued in 2013, was converted to euros using combined interest rate and currency swaps, as the private placement exposes BASF to a combined interest rate and currency risk. BASF is also exposed to a combined interest rate and currency risk associated with the issue of several tranches of a fixed-interest U.S. private placement in 2024. The resulting currency risks were hedged with combined interest rate and currency swaps in 2023. These hedges were designated as cash flow hedges. No ineffectiveness was recognized in 2024 or 2023. The hedged interest rate was 3.66% and the hedged foreign exchange rate was $1.2052 per euro in both years. For U.S. private placements hedged in 2023, changes in value in the forward component totaling €48 million were recognized separately in equity as hedging costs in 2024, leading to a decrease in equity (previous year: €14 million increase in equity).

Furthermore, BASF was exposed to foreign currency risks in 2024 through U.S. dollar-denominated commercial paper. These risks were hedged with foreign currency forward contracts and designated in a cash flow hedge accounting relationship. The changes in value in the amount of €7 million resulting from the change in the forward rate were recognized separately in equity as hedging costs, leading to an increase in equity (previous year: €30 million increase in equity). Because all underlying transactions and hedging instruments had expired by December 31, 2024, the amount of €7 million, which was initially recognized in equity, was reclassified in full as an increase in earnings (previous year: €30 million increase in earnings). There was no ineffectiveness at any time during the year.

In connection with construction of the new Verbund site in Zhanjiang, China, BASF is exposed to foreign currency risks, especially from expenditures in euros that were hedged with foreign currency forward contracts and designated in cash flow hedge accounting relationships. The hedged exchange rate was ¥7.6103 per euro in 2024 (previous year: ¥7.5738 per euro). The expenditures in euros hedged with foreign currency forward contracts are firm commitments. In 2024, €2 million was derecognized from the cash flow hedge reserve and included in the cost of property, plant and equipment (previous year: €3 million). Hedging results are recognized in profit or loss upon depreciation of property, plant and equipment.

Furthermore, BASF was exposed to a combined interest rate and currency risk in 2024 from a fixed-interest loan in Polish zloty, which was converted to euros through currency swaps. This hedge was designated as a cash flow hedge. The hedged exchange rate was zł4.7065 per euro and the hedged interest rate was 3.20%. In 2024, the changes in value in the amount of €5 million resulting from the forward component’s changed market rate were recognized separately in equity as hedging costs, leading to a decrease in equity (previous year: €7 million increase in equity). There was no ineffectiveness at any time during the year.

The effects of the hedging relationships on the balance sheet, the cash flow hedge reserve, hedged nominal value and ineffectiveness to be determined are presented in the following tables by fiscal year.

The occurrence of all forecasted transactions was considered to be highly probable at all times during fiscal years 2024 and 2023. Amounts accumulated in the cash flow hedge reserve for commodity price risks are derecognized against the carrying amount of acquired assets once the hedged transaction occurs. Thus, there is no immediate reclassification of the amounts recognized in the cash flow hedge reserve to profit or loss in these cases.