Accounting policy
Cash and cash equivalents comprise cash at banks and in hand and deposits held at call with banks with a maturity of less than three months at inception.
Deposits will be classified as ‘cash equivalent’ if held at banks with a maturity of less than three months at inception. Deposits will be classified as ‘current investments’ if the maturity is more than three months but less than or equal to one year. Bank overdrafts are included in current liabilities.
Included in cash and cash equivalents are investments in money-market funds that do not meet the SPPI (Solely Payments of Principal & Interest) criterion but are held to meet short-term cash demand. Money-market fund investments have been placed with institutions with a high credit rating in line with our counterparty policy.
Cash and cash equivalents are measured at amortized cost, or at fair value through profit and loss.
|
|
2023 |
|
2022 |
|---|---|---|---|---|
Deposits |
|
384 |
|
23 |
Money-market funds |
|
931 |
|
1,493 |
Cash at bank and in hand |
|
1,139 |
|
1,221 |
Payments in transit |
|
2 |
|
18 |
Total |
|
2,456 |
|
2,755 |
The purpose of the deposits and money-market funds is either to meet short-term cash commitments, or to manage liquidity to such an extent that yields are optimized, while allowing dsm-firmenich sufficient freedom in fulfilling its (strategic) goals.
Cash at year-end 2023 was not being used as collateral and therefore was not restricted (same as in 2022).
In a few countries, dsm-firmenich faces cross-border foreign exchange controls and/or other legal restrictions that limit its ability to make these balances available at short notice for general use by the group. The amount of cash held in these countries was €211 million at year-end 2023 (2022: €105 million). The cash will generally be invested or held in the relevant country and, given the other liquidity resources available to the Group, does not significantly affect the ability of the Group to meet its obligations.
For more information regarding the counterparty policy, see Note 23 Financial instruments and risks.