Accounting policy
Property, plant and equipment owned
Items of Property, plant and equipment owned are measured at cost less depreciation calculated on a straight-line basis over their estimated useful lives and less any impairment losses. Borrowing costs during construction are capitalized when the underlying asset under construction meets the recognition criteria of a qualifying asset. Subsequent expenditure is capitalized only when it is probable that future economic benefits associated with the item will flow to the Group. The initially assumed expected useful lives are in principle as follows:
Buildings: 10–50 years
Plant and equipment: 4–15 years
Land is not depreciated
An item of Property, plant and equipment owned is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use or the sale of the asset. Any gain or loss arising on derecognition of the asset is recorded in profit or loss.
Right-of-use assets (leases)
dsm-firmenich mainly leases offices, warehouses, vehicles, machinery, and other equipment.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. Right-of-use assets are measured at cost less any depreciation on a straight-line basis over the expected lease term, less any impairment losses, and adjusted for remeasurements of the lease liability. In line with the initially assumed expected useful life of the corresponding asset class within Property, plant and equipment, the minimum expected lease term for building leases is in principle 10 years. However, the contractual terms or specific circumstances could require applying the shorter non-cancellable period in determining the expected lease term. For vehicle leases, the expected lease term is set equal to the contractual term (four to five years).
Impairment of property, plant or equipment
If there is an indication of impairment, the carrying amount of an item of property, plant and equipment or the cash generating unit (CGU) to which it belongs is reviewed and the recoverable amount of the asset or the CGU is estimated. An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. An impairment loss is reversed when there has been a change in estimate that is relevant for the determination of the asset’s recoverable amount since the last impairment loss was recognized.
Estimates and judgments
Key estimates and judgments dsm-firmenich makes in the accounting for items of property, plant and equipment relate to:
The depreciation period of items of Property, plant and equipment, which depend on their useful lives
The determination of the lease term for lease contracts based on assessment of available renewal options. Estimates are based on the underlying asset class, past practices and current business outlooks
The estimation and allocation of future cash flows, growth rates, discount rates and fair values minus costs of disposal for the impairment testing of items of Property, plant and equipment. These estimates are based on historical and current market rates, experience, and current business outlooks
Property, plant and equipment
In 2025, impairment losses of €32 million on Property, plant and equipment owned (2024: €128 million) and of €2 million on Right-of-use assets (2024: nil) were recognized. See also Note 2 Alternative performance measures.
In addition, following the classification of the ANH business as held for sale, €1,461 million and €60 million in, respectively, Property, plant and equipment owned and Right-of-use assets were reclassified accordingly at year-end 2025.
|
|
2025 |
|
2024 |
|---|---|---|---|---|
Property, plant and equipment owned |
|
3,738 |
|
5,223 |
Right-of-use assets |
|
436 |
|
502 |
Total |
|
4,174 |
|
5,725 |
|
|
Land and buildings |
|
Plant and equipment |
|
Under construction |
|
Total |
|---|---|---|---|---|---|---|---|---|
Balance at January 1, 2024 |
|
|
|
|
|
|
|
|
Cost |
|
2,962 |
|
5,642 |
|
809 |
|
9,413 |
Depreciation and impairments |
|
925 |
|
3,332 |
|
– |
|
4,257 |
Carrying amount at January 1, 2024 |
|
2,037 |
|
2,310 |
|
809 |
|
5,156 |
|
|
|
|
|
|
|
|
|
Changes in carrying amount: |
|
|
|
|
|
|
|
|
- Capital expenditure |
|
11 |
|
57 |
|
645 |
|
713 |
- Put into operation |
|
91 |
|
440 |
|
(531) |
|
– |
- Disposals and deconsolidations |
|
(56) |
|
(66) |
|
(2) |
|
(124) |
- Depreciation |
|
(122) |
|
(359) |
|
– |
|
(481) |
- Impairment losses |
|
(35) |
|
(90) |
|
(3) |
|
(128) |
- Exchange differences |
|
44 |
|
32 |
|
12 |
|
88 |
- Transfers |
|
– |
|
– |
|
(1) |
|
(1) |
|
|
(67) |
|
14 |
|
120 |
|
67 |
|
|
|
|
|
|
|
|
|
Balance at December 31, 2024 |
|
|
|
|
|
|
|
|
Cost |
|
2,886 |
|
5,651 |
|
930 |
|
9,467 |
Depreciation and impairments |
|
916 |
|
3,327 |
|
1 |
|
4,244 |
Carrying amount at December 31, 2024 |
|
1,970 |
|
2,324 |
|
929 |
|
5,223 |
|
|
|
|
|
|
|
|
|
Changes in carrying amount: |
|
|
|
|
|
|
|
|
- Capital expenditure |
|
10 |
|
61 |
|
633 |
|
704 |
- Put into operation |
|
131 |
|
354 |
|
(485) |
|
– |
- Disposals and deconsolidations |
|
(13) |
|
(4) |
|
(1) |
|
(18) |
- Depreciation |
|
(117) |
|
(345) |
|
– |
|
(462) |
- Impairment losses |
|
(17) |
|
(12) |
|
(3) |
|
(32) |
- Reclassification to held for sale |
|
(438) |
|
(888) |
|
(135) |
|
(1,461) |
- Exchange differences |
|
(80) |
|
(86) |
|
(47) |
|
(213) |
- Transfers |
|
– |
|
– |
|
(3) |
|
(3) |
|
|
(524) |
|
(920) |
|
(41) |
|
(1,485) |
|
|
|
|
|
|
|
|
|
Balance at December 31, 2025 |
|
|
|
|
|
|
|
|
Cost |
|
1,963 |
|
2,963 |
|
888 |
|
5,814 |
Depreciation and impairments |
|
517 |
|
1,559 |
|
– |
|
2,076 |
Carrying amount at December 31, 2025 |
|
1,446 |
|
1,404 |
|
888 |
|
3,738 |
|
|
Land and buildings |
|
Plant and equipment |
|
Total |
|---|---|---|---|---|---|---|
Balance at January 1, 2024 |
|
312 |
|
81 |
|
393 |
|
|
|
|
|
|
|
Changes in carrying amount: |
|
|
|
|
|
|
New leases/remeasurements |
|
170 |
|
28 |
|
198 |
Depreciation |
|
(65) |
|
(31) |
|
(96) |
Impairments |
|
– |
|
– |
|
– |
Exchange rate differences |
|
7 |
|
– |
|
7 |
|
|
112 |
|
(3) |
|
109 |
|
|
|
|
|
|
|
Balance at December 31, 2024 |
|
|
|
|
|
|
Cost |
|
577 |
|
131 |
|
708 |
Depreciation and impairments |
|
(153) |
|
(53) |
|
(206) |
Carrying amount at December 31, 2024 |
|
424 |
|
78 |
|
502 |
|
|
|
|
|
|
|
Changes in carrying amount: |
|
|
|
|
|
|
New leases/remeasurements |
|
84 |
|
33 |
|
117 |
Depreciation |
|
(70) |
|
(28) |
|
(98) |
Reclassification to held for sale |
|
(33) |
|
(27) |
|
(60) |
Impairments |
|
– |
|
(2) |
|
(2) |
Exchange rate differences |
|
(21) |
|
(2) |
|
(23) |
|
|
(40) |
|
(26) |
|
(66) |
|
|
|
|
|
|
|
Balance at December 31, 2025 |
|
|
|
|
|
|
Cost |
|
535 |
|
82 |
|
617 |
Depreciation and impairments |
|
(151) |
|
(30) |
|
(181) |
Carrying amount at December 31, 2025 |
|
384 |
|
52 |
|
436 |
For the disclosures on the lease liabilities that correspond with the right-of-use assets, see Note 19 Borrowings.