11 » Right-of-Use Assets
The company recognized right-of-use assets in an amount of € 2.7 billion (2021: € 2.6 billion). The following table presents a reconciliation of the carrying amount of right-of-use assets:
|
|
Land and buildings |
|
Technical equipment and machinery |
|
Other equipment, furniture, and fixtures |
|
Right-of-use assets |
|---|---|---|---|---|---|---|---|---|
January 1, 2022 |
|
2,493 |
|
52 |
|
24 |
|
2,569 |
Additions |
|
853 |
|
10 |
|
28 |
|
892 |
Disposals |
|
(68) |
|
– |
|
– |
|
(67) |
Depreciation |
|
(639) |
|
(32) |
|
(19) |
|
(690) |
Impairment losses |
|
(60) |
|
|
|
|
|
(60) |
Reversal of impairment losses |
|
1 |
|
– |
|
– |
|
1 |
Currency translation differences |
|
18 |
|
0 |
|
– |
|
19 |
Other |
|
3 |
|
– |
|
– |
|
3 |
December 31, 2022 |
|
2,600 |
|
31 |
|
34 |
|
2,665 |
|
|
Land and buildings |
|
Technical equipment and machinery |
|
Other equipment, furniture, and fixtures |
|
Right-of-use assets |
|---|---|---|---|---|---|---|---|---|
January 1, 2021 |
|
2,317 |
|
88 |
|
25 |
|
2,430 |
Additions |
|
500 |
|
2 |
|
19 |
|
521 |
Disposals |
|
– |
|
– |
|
– |
|
– |
Transfer to assets held for sale |
|
(94) |
|
– |
|
(1) |
|
(94) |
Depreciation |
|
(563) |
|
(42) |
|
(20) |
|
(625) |
Impairment losses |
|
(3) |
|
– |
|
– |
|
(3) |
Reversal of impairment losses |
|
25 |
|
– |
|
– |
|
25 |
Currency translation differences |
|
89 |
|
0 |
|
0 |
|
89 |
Net change due to remeasurements |
|
222 |
|
4 |
|
(0) |
|
226 |
December 31, 2021 |
|
2,493 |
|
52 |
|
24 |
|
2,569 |
As a general principle, it is regularly assessed whether there are any indications that right-of-use assets might be impaired. Irrespective of the existence of such indications, right-of-use assets in adidas’ own retail stores are tested annually for impairment, whereby the recoverable amount, as part of determining the profitability of the adidas’ own retail stores, is calculated using the ‘discounted cash flow method.’
Impairment losses for right-of-use assets recognized in 2022 mainly relate to the company’s own retail activities and right-of-use assets in Russia and Ukraine, for which, contrary to expectations based in 2021, there will be a lower future economic benefit.
In 2022, impairment losses of € 126 million were recognized for non-current assets (property, plant, and equipment, right-of-use assets). Thereof € 20 million are related to the company’s own retail activities and are mainly attributable to EMEA with € 13 million; Asia-Pacific with € 5 million; and Greater China with € 3 million. Discount rates between 8.6% and 15.2% were used to calculate the impairment for the value in use. The recoverable amounts of adidas´own retail stores break down into Asia-Pacific at € 176 million, EMEA at € 80 million, North America at € 30 million, Greater China at € 28 million, other businesses at € 5 million and Latin America at € 1 million. Due to the conflict between Russia and Ukraine and the decision to permanently wind down the business activities in Russia in 2022, impairment losses of € 94 million were recognized for both countries mentioned. These mainly include the impairment of the warehouse in Russia, which was impaired by € 31 million to its fair value of € 29 million based on an external appraisal. The impairment losses were recognized in the other operating expenses.
The income from sub-leasing of right-of-use assets recognized in the consolidated income statement in 2022 amounts to € 3 million (2021: € 3 million).
Further information on total depreciation and amortization expenses, impairment losses and reversals of impairment losses is provided in these Notes. SEE NOTE 32
