14. Fixed Assets
The content of this section is not part of the statutory audit of the annual financial statements but has undergone a separate limited assurance by our auditor.
The content of this section is voluntary, unaudited information, which was critically read by the auditor.
Accounting policies
Intangible assets
Goodwill is only written down in the case of an impairment. Impairment testing for goodwill is performed once a year and whenever there is an indication of impairment. Goodwill impairments are not reversed.
Acquired intangible assets (excluding goodwill) with defined useful lives are generally measured at cost less straight-line amortization and impairments. The useful life is determined using the period of the underlying contract or the period of time over which the intangible asset can be expected to be used.
Intangible assets with indefinite useful lives are mainly trade names and trademarks that have been acquired as part of acquisitions. These are measured at cost and tested for impairment annually, or if there is an indication that their value has declined.
Internally generated intangible assets primarily comprise internally developed software. Such software and other internally generated intangible assets are measured at cost and amortized over their estimated useful lives. Impairments are recognized if the carrying amount of an asset exceeds the recoverable amount. In addition to those costs directly attributable to the asset, costs of internally generated intangible assets also include an appropriate portion of overhead costs.
The expected useful lives and amortization methods of intangible assets are based on historical values, plans and estimates.
Depending on the type of intangible asset, amortization is reported under cost of sales, selling expenses, research and development expenses or other operating expenses.
Property, plant and equipment
Property, plant and equipment are measured at cost less depreciation and impairment over their useful lives. The revaluation method is not applied. Low-value assets are fully expensed in the year of acquisition.
The cost of self-constructed plants includes direct costs, appropriate allocations of material and production overhead costs, and a share of the general administrative costs of the divisions involved in the construction of the plants.
Expenses related to the scheduled maintenance of large-scale plants are capitalized separately and depreciated using the straight-line method over the period until the next planned turnaround. Costs for the replacement of components are recognized as assets if an additional future benefit is expected. The carrying amount of the replaced components is derecognized. Costs for maintenance and repair as part of normal business operations are recognized as an expense.
Investment properties held to realize capital gains or rental income are immaterial. They are valued at the lower of fair value or cost less depreciation.
The estimated useful lives and depreciation methods of property, plant and equipment are based on historical values, plans and estimates. The depreciation methods, useful lives and residual values are reviewed at each balance sheet date. Movable and immovable property, plant and equipment are principally depreciated using the straight-line method.
Borrowing costs: If borrowing costs are directly incurred as part of the acquisition, construction or production of a qualifying asset, they are capitalized as part of the acquisition or production cost of that asset. A qualifying asset is an asset for which the process necessary to make it ready for its intended use or sale is longer than one year. Borrowing costs are capitalized up to the date the asset is ready for its intended use. Borrowing costs were calculated based on a rate of 2.25% (previous year: 1.75%). All other borrowing costs are recognized as an expense in the period in which they are incurred.
Government grants: Government grants for the acquisition or construction of property, plant and equipment reduce the acquisition or construction cost of the respective assets (net method). Other government grants or government assistance are recognized immediately as other operating income or treated as deferred income and released over the underlying period.
Impairment tests
Impairment tests are carried out on intangible assets, property, plant and equipment, and goodwill whenever certain triggering events indicate potential impairment. External triggering events include, for example, changes in customer industries, technologies used and economic downturns, or expected impacts from climate change. Internal triggering events for an impairment test include lower product profitability, planned restructuring measures or physical damage to assets. In addition, goodwill and intangible fixed assets with an indefinite useful life are tested for impairment annually.
Impairment tests entail a comparison of the carrying amount and the recoverable amount. The recoverable amount is the higher of fair value less costs to sell and the value in use. As a rule, value in use is determined using the discounted cash flow method. The estimation of cash flows and the assumptions used consider all information available on the respective balance sheet date about the future development of the operating business. Actual future developments may vary. Impairment testing relies upon the cash-generating unit’s long-term earnings forecasts, which are based on macroeconomic trends.
The weighted average cost of capital (WACC) after taxes based on the capital asset pricing model, which is used in calculating the discount for cash flows, plays an important role in impairment testing. It comprises a risk-free interest rate, the market risk premium and an industry-specific spread for the credit risk. Additional important parameters are the detailed planning period and, if applicable, the terminal growth rates used.
An impairment of assets (excluding goodwill) is recognized if the recoverable amount of the asset is lower than the carrying amount. An impairment is recognized for the difference between the carrying amount and the recoverable amount. If the reasons for impairment of an asset (excluding goodwill) no longer exist, the write-downs are reversed up to the value of the asset, had an impairment not been recognized. Impairments and reversals of impairments are reported in other operating income and expenses.
The goodwill impairment test is based on cash-generating units or groups of cash-generating units. At BASF, these largely correspond to the divisions, or in individual cases the business units. If there is a need for impairment, the existing goodwill is, if necessary, completely written off as a first step. If there is further need for impairment, this is allocated to the remaining assets of the cash-generating unit. Goodwill impairments are reported under other operating expenses.
The respective recoverable amounts were generally determined using the value in use. Plans approved by company management and their respective cash flows for the next five years were used.
A terminal value was calculated for the subsequent period using a forward projection from the last detailed planning year as a perpetual annuity. Planning is based on experience, current performance and management’s best possible estimates on the future development of individual parameters. These include sales revenue (excluding precious metals), contribution margins, fixed costs and investments from which income from operations before depreciation and amortization and, based on this, the EBITDA margin are determined. Market assumptions regarding, for example, gas and raw materials prices, exchange rates, economic development, inflation expectations and market growth of the respective customer industries are included based on external macroeconomic and industry-specific sources.
In addition, planning is also based on the strategies of the individual strategic business units and divisions which comprise the respective cash-generating units. The digitalization and sustainability trends identified in the strategies are thus taken into account in the respective impairment tests (for more information on strategy and identified digitalization and sustainability trends, see Our Strategy and Business Models of the Segments in the Combined Management’s Report).
14.1 Explanation of intangible assets
The weighted average amortization periods of intangible assets were as follows:
|
2024 |
2023 |
---|---|---|
Distribution and similar rights |
14 |
14 |
Product rights, licenses and trademarks |
19 |
18 |
Know-how, patents and production technologies |
15 |
16 |
Internally generated intangible assets |
8 |
6 |
Other rights and values |
7 |
7 |
The following table shows the development of intangible assets.
Million € |
Distribution and |
Product rights, |
Know-how, |
Internally |
Other |
Goodwill |
Total |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cost |
|
|
|
|
|
|
|
|||||||||||
As of January 1, 2024 |
2,244 |
1,309 |
4,296 |
323 |
898 |
8,269 |
17,338 |
|||||||||||
Changes in the scope of consolidation |
1 |
– |
– |
– |
– |
– |
1 |
|||||||||||
Additions |
– |
2 |
72 |
44 |
14 |
– |
132 |
|||||||||||
Additions from acquisitions |
– |
– |
1 |
– |
– |
– |
1 |
|||||||||||
Disposals |
–226 |
–21 |
–102 |
–41 |
–148 |
–4 |
–541 |
|||||||||||
Transfers |
1 |
– |
–9 |
–10 |
17 |
– |
–1 |
|||||||||||
Transfers to disposal groups |
–86 |
–4 |
–40 |
– |
– |
–5 |
–135 |
|||||||||||
Currency effects |
40 |
33 |
128 |
1 |
4 |
250 |
455 |
|||||||||||
As of December 31, 2024 |
1,973 |
1,319 |
4,346 |
317 |
785 |
8,510 |
17,249 |
|||||||||||
Accumulated amortization |
|
|
|
|
|
|
|
|||||||||||
As of January 1, 2024 |
1,303 |
319 |
1,770 |
196 |
765 |
769 |
5,122 |
|||||||||||
Changes in the scope of consolidation |
1 |
– |
– |
– |
– |
– |
1 |
|||||||||||
Additions |
156 |
67 |
333 |
61 |
53 |
– |
670 |
|||||||||||
of which impairments |
1 |
5 |
60 |
20 |
1 |
– |
87 |
|||||||||||
Disposals |
–226 |
–21 |
–104 |
–41 |
–139 |
– |
–531 |
|||||||||||
Transfers |
– |
– |
– |
– |
– |
– |
– |
|||||||||||
Transfers to disposal groups |
–71 |
–4 |
–35 |
– |
– |
– |
–110 |
|||||||||||
Currency effects |
27 |
7 |
57 |
– |
3 |
20 |
114 |
|||||||||||
As of December 31, 2024 |
1,190 |
368 |
2,021 |
217 |
681 |
789 |
5,267 |
|||||||||||
Net carrying amount as of December 31, 2024 |
783 |
950 |
2,325 |
101 |
103 |
7,721 |
11,983 |
|||||||||||
|
Additions in 2024 related primarily to production technologies and internally developed software in the Agricultural Solutions and Surface Technologies segments.
Disposals of intangible assets with a gross carrying amount of €541 million primarily concerned fully amortized assets.
In 2024, additions to accumulated amortization contained impairments of €87 million. These related mainly to know-how and production technologies in the Nutrition & Care segment and resulted from the discontinuation of an investment project.
Million € |
Distribution and |
Product rights, |
Know-how, |
Internally |
Other |
Goodwill |
Total |
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cost |
|
|
|
|
|
|
|
|||||||||||
As of January 1, 2023 |
2,441 |
1,346 |
4,435 |
296 |
898 |
8,490 |
17,904 |
|||||||||||
Changes in the scope of consolidation |
– |
– |
– |
– |
– |
– |
– |
|||||||||||
Additions |
2 |
2 |
66 |
40 |
33 |
– |
142 |
|||||||||||
Additions from acquisitions |
– |
– |
– |
– |
– |
– |
– |
|||||||||||
Disposals |
–129 |
–18 |
–102 |
–13 |
–37 |
–8 |
–307 |
|||||||||||
Transfers |
– |
– |
–16 |
– |
10 |
– |
–6 |
|||||||||||
Transfers to disposal groups |
– |
– |
– |
– |
– |
– |
– |
|||||||||||
Currency effects |
–69 |
–20 |
–86 |
– |
–6 |
–214 |
–396 |
|||||||||||
As of December 31, 2023 |
2,244 |
1,309 |
4,296 |
323 |
898 |
8,269 |
17,338 |
|||||||||||
Accumulated amortization |
|
|
|
|
|
|
|
|||||||||||
As of January 1, 2023 |
1,301 |
279 |
1,636 |
180 |
442 |
794 |
4,632 |
|||||||||||
Changes in the scope of consolidation |
– |
– |
– |
– |
– |
– |
– |
|||||||||||
Additions |
168 |
62 |
265 |
29 |
354 |
– |
879 |
|||||||||||
of which impairments |
– |
– |
1 |
– |
266 |
– |
267 |
|||||||||||
Disposals |
–129 |
–18 |
–96 |
–13 |
–27 |
– |
–283 |
|||||||||||
Transfers |
– |
– |
–1 |
– |
1 |
– |
– |
|||||||||||
Transfers to disposal groups |
– |
– |
– |
– |
– |
– |
– |
|||||||||||
Currency effects |
–37 |
–5 |
–35 |
– |
–4 |
–24 |
–105 |
|||||||||||
As of December 31, 2023 |
1,303 |
319 |
1,770 |
196 |
765 |
769 |
5,122 |
|||||||||||
Net carrying amount as of December 31, 2023 |
940 |
990 |
2,526 |
127 |
132 |
7,499 |
12,216 |
|||||||||||
|
In both years, BASF’s goodwill was allocated to 20 cash-generating units, which are defined either on the basis of business units or at a higher level.
Steering and reporting structures were adjusted with the introduction of the Differentiated Steering concept as of 2024. This also resulted in changes to internal goodwill monitoring. For this reason, the affected cash-generating units in the Coatings, Care Chemicals, Dispersions & Resins, Intermediates and Petrochemicals divisions have since been combined or expanded at a higher level to reflect the adjusted structures. Accordingly, annual impairment tests have been performed in a total of 14 cash-generating units or groups of cash-generating units at division level since 2024.
In the second quarter of 2024, an impairment test was performed for the battery materials cash-generating unit, which is allocated to the Catalysts division, in light of developments in the business environment. The test showed no indications of goodwill impairment as of June 30, 2024.
For the impairment test of the battery materials cash-generating unit as of December 31, 2024, the recoverable amount was determined based on fair value less costs of disposal. Based on the parameters used, this is a level 3 fair value.
It exceeded the unit’s value in use. A detailed planning period of ten years was used to reflect expected market developments. A delay in demand for electric vehicles and the associated battery materials is anticipated in the years to come. In the medium term, however, demand for battery materials is expected to grow.
The ongoing transformation of the automotive industry is expected to have a significant impact on the emissions catalyst business, which belongs to the Catalysts (excluding battery materials) cash-generating unit. Because there were no changes in planning assumptions from the previous year, the growth rate for perpetual annuity remained unchanged at –0.7%. Due to higher environmental standards, demand for catalysts is still expected to remain stable in the planning period. In the medium term, the transition from combustion engines to electromobility will lead to a steady decline in demand.
Increased volatility in gas and raw materials prices can be expected during the year due to geopolitical conflicts. For the individual years within the planning period, however, average gas and other raw materials prices are expected to remain stable or decrease slightly. These and other macroeconomic factors such as the further decline in inflation in industrial countries will be accounted for in future business expectations.
Million € |
2024 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Cash-generating unit or group of cash-generating units |
Goodwill |
Weighted cost of capital after taxes |
Growth ratea |
|||||||
Agricultural Solutions division |
3,341 |
6.30% |
2.00% |
|||||||
Catalysts division (excluding battery materials) |
1,344 |
7.57% |
–0.70% |
|||||||
Battery materials in the Catalysts division |
330 |
7.57% |
2.00% |
|||||||
Care Chemicals division |
677 |
6.64% |
2.00% |
|||||||
Coatings division |
723 |
7.57% |
2.00% |
|||||||
Performance Chemicals division |
349 |
6.84% |
2.00% |
|||||||
Other cash-generating units |
957 |
6.64% – 7.08% |
0.0% – 2.0% |
|||||||
Goodwill as of December 31 |
7,721 |
|
|
|||||||
|
Million € |
2023 |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|
Cash-generating unit |
Goodwill |
Weighted cost of capital after taxes |
Growth ratea |
|||||||
Agricultural Solutions division |
3,236 |
6.52% |
2.00% |
|||||||
Catalysts division (excluding battery materials) |
1,297 |
8.14% |
–0.70% |
|||||||
Battery materials in the Catalysts division |
317 |
8.36% |
2.00% |
|||||||
Personal Care Ingredients in the Care Chemicals division |
504 |
7.06% |
2.00% |
|||||||
Surface Treatment in the Coatings division |
688 |
8.14% |
2.00% |
|||||||
Performance Chemicals division |
347 |
8.03% |
2.00% |
|||||||
Other cash-generating units |
1,109 |
6.47% – 8.56% |
0.0% – 2.0% |
|||||||
Goodwill as of December 31 |
7,499 |
|
|
|||||||
|
The annual impairment tests of the 14 cash-generating units or groups of cash-generating units were performed as of December 31, 2024. The calculation also takes into account capital structure and the beta factor of the respective peer group as well as the average tax rate of each cash-generating unit. Impairment tests were performed on the units assuming a weighted average cost of capital rate after taxes of between 6.30% and 7.58% (previous year: between 6.47% and 8.56%). This corresponds to a weighted average cost of capital rate before taxes of between 7.74% and 10.19% (previous year: between 8.12% and 11.33%).
After determining the recoverable amounts for the cash-generating units, the conclusion was that reasonable possible deviations from the key assumptions would not lead to the carrying amount of any unit exceeding the respective recoverable amounts except in the battery materials unit, which is allocated to the Surface Technologies segment.
In the annual impairment test of the battery materials cash-generating unit, a weighted cost of capital after taxes of 7.57% (previous year: 8.36%) and an EBITDA margin from the last detailed planning year were used as the basis to calculate the final value of 11.51% (previous year: 11.84%) were used for the annual impairment test of the battery materials cash-generating unit. The recoverable amount for this unit exceeded the carrying amount by €341 million. The recoverable amount would be equal to the unit’s carrying amount if the weighted average cost of capital rose by 0.89percentage points, the growth rate were 1.77percentage points lower, or the EBITDA margin in the last detailed planning year used as the basis for calculating the final value were 2.00 percentage points lower.
14.2 Explanation of property, plant and equipment
The weighted average depreciation periods were as follows:
|
2024 |
2023 |
---|---|---|
Buildings and structural installations |
18 |
18 |
Machinery and technical equipment |
10 |
11 |
Miscellaneous equipment and fixtures |
7 |
7 |
The following table shows the development of property, plant and equipment including right-of-use assets recognized by BASF as lessee (for more information on leases, see Note 15).
Million € |
Land |
Right-of-use land |
Buildings |
Right-of-use buildings |
Machinery and technical |
Right-of-use machinery and technical equipment |
Miscellaneous |
Right-of-use miscellaneous equipment and fixtures |
Advance payments and construction in progress |
Total |
---|---|---|---|---|---|---|---|---|---|---|
Cost |
|
|
|
|
|
|
|
|
|
|
As of January 1, 2024 |
878 |
695 |
12,136 |
1,129 |
49,184 |
759 |
5,291 |
1,112 |
6,701 |
77,884 |
Changes in the scope of consolidation |
– |
– |
– |
– |
1 |
– |
– |
– |
– |
2 |
Additions |
14 |
23 |
166 |
125 |
771 |
72 |
213 |
208 |
4,914 |
6,506 |
Additions from acquisitions |
– |
7 |
40 |
– |
137 |
1 |
3 |
– |
– |
188 |
Disposals |
–7 |
–22 |
–104 |
–64 |
–510 |
–13 |
–276 |
–121 |
–62 |
–1,180 |
Transfers |
2 |
– |
410 |
– |
1,505 |
– |
163 |
–1 |
–2,072 |
7 |
Transfers to disposal groups |
–11 |
–1 |
–54 |
– |
–111 |
–3 |
–12 |
– |
–3 |
–195 |
Currency effects |
7 |
18 |
160 |
17 |
873 |
19 |
80 |
9 |
234 |
1,416 |
As of December 31, 2024 |
883 |
720 |
12,753 |
1,207 |
51,849 |
834 |
5,461 |
1,208 |
9,712 |
84,627 |
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
As of January 1, 2024 |
49 |
173 |
7,665 |
544 |
39,936 |
453 |
4,138 |
586 |
260 |
53,804 |
Changes in the scope of consolidation |
– |
– |
– |
– |
1 |
– |
– |
– |
– |
1 |
Additions |
2 |
24 |
547 |
127 |
2,504 |
95 |
381 |
191 |
107 |
3,978 |
of which impairments |
1 |
2 |
162 |
3 |
388 |
1 |
26 |
– |
108 |
689 |
Disposals |
– |
–22 |
–98 |
–47 |
–499 |
–12 |
–249 |
–115 |
–60 |
–1,103 |
Transfers |
– |
– |
4 |
– |
6 |
– |
7 |
–1 |
–19 |
–3 |
Transfers to disposal groups |
– |
– |
–25 |
– |
–90 |
–2 |
–10 |
– |
– |
–127 |
Currency effects |
2 |
4 |
102 |
7 |
688 |
10 |
63 |
4 |
– |
879 |
As of December 31, 2024 |
52 |
179 |
8,194 |
632 |
42,546 |
544 |
4,331 |
664 |
288 |
57,430 |
Net carrying amount as of |
832 |
541 |
4,558 |
575 |
9,303 |
290 |
1,131 |
544 |
9,424 |
27,197 |
Additions to property, plant and equipment arising from investment projects (excluding leases) amounted to €6,078 million in 2024 (previous year: €5,255 million). Investments were made at the following sites in particular: Zhanjiang, China; Ludwigshafen, Germany; Geismar, Louisiana; Antwerp, Belgium; and Chalampé, France. Material investments included the development of infrastructure and technical equipment at the new Verbund site in Zhanjiang, modification and capacity expansion of the MDI plant in Geismar, and construction of the hexamethylenediamine plant in Chalampé. Investments also included construction of the menthol and linalool plants, construction of the water electrolysis plant as well as modification of the acid chloride and chloroformate plant in Ludwigshafen.
Government grants for funding investment measures reduced asset additions by €73 million (previous year: €48 million).
In 2024, accumulated depreciation included impairments in the amount of €694 million (previous year: €883 million) and reversals of impairments to an immaterial extent in the amount of €5 million (previous year: €6 million).
Impairments of €532 million were recognized for technical equipment, buildings and plants under construction in the Surface Technologies segment. These impairments were due to weakened demand and affected mainly production sites in Europe. A further impairment of €34 million was recognized in the Chemicals segment for technical equipment at the production site in Ludwigshafen, Germany, resulting from the worsened expected cost position caused by persistently high gas prices in Europe. The value in use of the remaining partially impaired plants was €244 million. A cost of capital rate after taxes of 7.06% was used in this impairment test. This corresponds to a cost of capital rate before taxes of 11.23%.
Impairments to plants under construction in the amount of €31 million related to discontinued investment projects.
Transfers comprised mainly the reclassification of operation-ready assets from construction in progress to other asset categories.
Transfers to disposal groups included the reclassified amounts for the Food and Health Performance Ingredients business as well as property, plant and equipment for BASF Markor Chemical Manufacturing (Xinjiang) Co., Ltd.
Currency effects increased property, plant and equipment by €537 million and resulted primarily from appreciation of the U.S. dollar and the Chinese renminbi against the euro.
Million € |
Land |
Right-of-use land |
Buildings |
Right-of-use buildings |
Machinery and technical equipment |
Right-of-use machinery and technical equipment |
Miscellaneous |
Right-of-use miscellaneous equipment and fixtures |
Advance payments and construction in progress |
Total |
---|---|---|---|---|---|---|---|---|---|---|
Cost |
|
|
|
|
|
|
|
|
|
|
As of January 1, 2023 |
939 |
732 |
11,855 |
1,036 |
48,559 |
736 |
5,268 |
886 |
5,135 |
75,145 |
Changes in the scope of consolidation |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
Additions |
1 |
2 |
187 |
169 |
808 |
84 |
180 |
353 |
4,080 |
5,864 |
Disposals |
–35 |
–4 |
–183 |
–53 |
–995 |
–40 |
–241 |
–118 |
–100 |
–1,769 |
Transfers |
1 |
– |
477 |
– |
1,604 |
–4 |
168 |
– |
–2,251 |
–5 |
Transfers to disposal groups |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
Currency effects |
–27 |
–34 |
–200 |
–23 |
–793 |
–18 |
–84 |
–10 |
–162 |
–1,352 |
As of December 31, 2023 |
878 |
695 |
12,136 |
1,129 |
49,184 |
759 |
5,291 |
1,112 |
6,701 |
77,884 |
Accumulated depreciation |
|
|
|
|
|
|
|
|
|
|
As of January 1, 2023 |
61 |
146 |
7,399 |
433 |
39,115 |
402 |
4,032 |
515 |
76 |
52,179 |
Changes in the scope of consolidation |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
Additions |
2 |
35 |
525 |
172 |
2,372 |
97 |
394 |
185 |
280 |
4,063 |
of which impairments |
1 |
13 |
149 |
46 |
355 |
4 |
27 |
2 |
280 |
877 |
Disposals |
–13 |
–2 |
–157 |
–47 |
–961 |
–35 |
–231 |
–108 |
–85 |
–1,639 |
Transfers |
– |
– |
3 |
– |
4 |
–2 |
5 |
– |
–10 |
– |
Transfers to disposal groups |
– |
– |
– |
– |
– |
– |
– |
– |
– |
– |
Currency effects |
–1 |
–7 |
–105 |
–14 |
–593 |
–10 |
–62 |
–6 |
–1 |
–797 |
As of December 31, 2023 |
49 |
173 |
7,665 |
544 |
39,936 |
453 |
4,138 |
586 |
260 |
53,804 |
Net carrying amount as of December 31, 2023 |
829 |
522 |
4,471 |
585 |
9,247 |
306 |
1,153 |
526 |
6,440 |
24,080 |
This content fulfills the Disclosure Requirements of the European Sustainability Reporting Standards (ESRS). The ESRS Index gives an overview of the references to the ESRSs in this report.