Note 13: Leases
AkzoNobel mainly leases land, office spaces, stores and cars. Some leases provide for additional rent payments that are based on changes in local price indices.
Some property leases contain extension options exercisable by AkzoNobel up to one year before the end of the non-cancellable contract period. We have estimated that the lease liability would increase by less than 20%, if we would exercise the extension options which are currently not included in the valuation of the lease liability. This excludes so-called “evergreens” or perpetual leases.
Total net cash outflow from financing activities related to leases recognized on the balance sheet was €104 million (2021: €100 million). Net cash outflow for leases not recognized on the balance sheet was €19 million (2021: €17 million).
Refer to Note 27 “Financial risk management” for the maturities of lease liabilities.
In € millions |
Land |
Buildings |
Other |
Total |
|---|---|---|---|---|
Balance at January 1, 2021 |
|
|
|
|
Cost of acquisition |
55 |
353 |
102 |
510 |
Accumulated depreciation/impairment |
(16) |
(128) |
(42) |
(186) |
Carrying value at January 1, 2021 |
39 |
225 |
60 |
324 |
|
|
|
|
|
Movements in 2021 |
|
|
|
|
Additions/modifications |
2 |
35 |
32 |
69 |
Disposals |
— |
(5) |
(2) |
(7) |
Depreciation |
(3) |
(60) |
(31) |
(94) |
Impairments, including reversals thereof |
— |
(2) |
— |
(2) |
Changes in exchange rates |
4 |
9 |
1 |
14 |
Total movements |
3 |
(23) |
— |
(20) |
|
|
|
|
|
Cost of acquisition |
61 |
372 |
109 |
542 |
Accumulated depreciation/impairment |
(19) |
(170) |
(49) |
(238) |
Carrying value at December 31, 2021 |
42 |
202 |
60 |
304 |
|
|
|
|
|
Movements in 2022 |
|
|
|
|
Acquisitions |
2 |
5 |
3 |
10 |
Additions/modifications |
— |
58 |
30 |
88 |
Disposals |
— |
(7) |
(2) |
(9) |
Depreciation |
(3) |
(64) |
(31) |
(98) |
Impairments, including reversals thereof |
— |
(3) |
— |
(3) |
Changes in exchange rates |
1 |
(2) |
— |
(1) |
Total movements |
— |
(13) |
— |
(13) |
|
|
|
|
|
Cost of acquisition |
64 |
393 |
117 |
574 |
Accumulated depreciation/impairment |
(22) |
(204) |
(57) |
(283) |
Carrying value at December 31, 2022 |
42 |
189 |
60 |
291 |
Impairments
Periodical evaluations are performed in order to ensure timely detection of triggers that might indicate impairment of assets. Whenever such triggers are noted, the related assets are assessed for impairment as appropriate.
In 2022 and 2021, no significant impairments were recognized.
The below table shows the total impact from leases on our profit and loss account.
In € millions |
2021 |
2022 |
|---|---|---|
Sub lease income |
3 |
2 |
Depreciation right-of-use assets |
(94) |
(98) |
Impairments for right-of-use assets |
(2) |
(3) |
Interest expense on lease liabilities |
(6) |
(6) |
Short-term lease expenses |
(7) |
(11) |
Expenses relating to low-value assets |
(5) |
(4) |
Variable lease expenses |
(5) |
(4) |
Total expenses |
-116.00 |
(124) |