Accounting policy
An associate is an entity over which dsm-firmenich has significant influence but no control or joint control, usually evidenced by a shareholding that entitles dsm-firmenich to between 20% and 50% of the voting rights. A joint venture is an entity over which dsm-firmenich has joint control and is entitled to its share of the net assets and liabilities.
Investments in associates and joint ventures are initially recognized at cost, including transaction costs. Subsequent to initial recognition, these investments are accounted for by the equity method, which involves recognition in the income statement of dsm-firmenich’s share of the associate’s or joint venture’s profit or loss for the year determined in accordance with the accounting policies of dsm-firmenich. Any other results at dsm-firmenich in relation to associated companies are recognized under Other results related to associates and joint ventures. dsm-firmenich’s interest in an associate or joint venture is carried in the balance sheet at its share in the net assets of the associate or joint venture together with goodwill paid on acquisition, less any impairment loss.
When dsm-firmenich’s share in the loss of an associate or joint venture exceeds the carrying amount of that entity, the carrying amount is reduced to zero. No further losses are recognized unless dsm-firmenich has responsibility for obligations relating to the entity.
Associates and joint ventures
The following table analyses, in aggregate, the carrying amount and share of profit of associates and joint ventures.
|
|
2023 |
|
2022 |
||||
|---|---|---|---|---|---|---|---|---|
|
|
Associates |
|
Joint ventures |
|
Total |
|
Total |
Balance at 1 January |
|
53 |
|
8 |
|
61 |
|
64 |
|
|
|
|
|
|
|
|
|
- Share of the profit of associates and joint ventures |
|
(6) |
|
- |
|
(6) |
|
10 |
- Other comprehensive income |
|
(3) |
|
- |
|
(3) |
|
- |
- Capital payments |
|
5 |
|
- |
|
5 |
|
4 |
- Dividends received |
|
(2) |
|
- |
|
(2) |
|
(2) |
- Acquisitions |
|
67 |
|
7 |
|
74 |
|
- |
- Disposals |
|
- |
|
- |
|
- |
|
(9) |
- Other |
|
1 |
|
- |
|
1 |
|
(6) |
Balance at 31 December |
|
115 |
|
15 |
|
130 |
|
61 |
For acquisitions, see Note 3 Change in the scope of consolidation. This mainly includes the 49% share in Essential Labs, LLC.
Joint operations
The operations Veramaris®2 (2017) and Avansya (2019) are accounted for in accordance with IFRS 11 for joint operations. dsm-firmenich therefore recognizes their amounts for the assets, liabilities, revenues and expenses in accordance with the contractual entitlement and obligations of dsm-firmenich, see also Note 1 General Information.