20 – Other Comprehensive Income

Accounting policies

The expenses and income shown in other comprehensive income are divided into two categories: Items that will be recognized in the income statement in the future (known as “recycling”) and items that will not be reclassified to the income statement in the future. The first category includes gains and losses from currency translation, the measurement of certain securities classified as debt instruments, and changes in the fair value of derivatives held to hedge future cash flows. Items that will not be reclassified to the income statement at a future date include effects from the remeasurement of defined benefit plans.

Remeasurement of defined benefit plans

Changes in the value of defined benefit plans reduced equity by €973 million in 2020, and by €393 million in the previous year (after taxes in both years). Of that amount, –€19 million was attributable to investments accounted for using the equity method in 2020 (2019: –€46 million). Deferred taxes amounted to €422 million in 2020, and €359 million in 2019.

Because of the disposal of the construction chemicals business on September 30, 2020, the amount of €53 million from the remeasurement of defined benefit plans was reclassified from income and expenses to retained earnings, in equity. In the previous year, this type of reclassification resulted in the amount of €140 million from the merger concluded on April 30, 2019 between Wintershall and DEA.

Currency translation

Differences resulting from currency translation reduced equity by a total of €2,598 million. This included deferred taxes in the amount of €19 million. At-equity investments accounted for €1,125 million. In 2020, the differences resulted primarily from the depreciation of the U.S. dollar and the Brazilian real relative to the euro in 2020.

Furthermore, as a result of divestitures, €71 million after taxes was reclassified to the income statement in 2020 and €834 million after taxes in 2019.

Cash flow hedges

Changes in the fair value of derivatives designated to hedging relationships (cash flow hedge) adjusted for deferred taxes in the amount of €24 million reduced equity by a total of €108 million. Of that amount, –€163 million related to the hedging of cash flows at shareholdings accounted for using the equity method.