Annual Report 2023


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33 » Hyperinflation

Due to the rapid devaluation of the Argentinian peso and the Turkish lira, Argentina and Turkey are considered to be hyperinflationary and as a result, the application of IAS 29 was adopted for the first time in the third quarter of 2018 (Argentina) and the second quarter of 2022 (Turkey). The financial statements of those subsidiaries that have the Argentinian peso or Turkish lira as a functional currency had been restated for the change in the general purchasing power retrospectively since January 1, 2018 (Argentina), and January 1, 2022 (Turkey). The financial statements are based on a historical cost approach. The prior-year figures of the Argentinian peso are stated in terms of the measuring unit current at December 31, 2022. Pursuant to IAS 21 ‘Effects of Changes in Foreign Exchange Rates,’ paragraph 42, the comparative amounts of the previous reporting period were not restated for the Turkish lira.

The Argentinian price index at December 31, 2023, was 44,914.03 (2022: 15,047.61). The price index in Turkey at December 31, 2023, was 1,859.38 (2022: 1,128.45).

Both for Argentina and for Turkey, for the translation into the presentation currency (euro), all amounts were translated at the closing rate at December 31, 2023. The net assets in the subsidiary’s local financial statements were adjusted for changes in the price level.

In 2023, the respective loss on the net monetary position has amounted to € 56 million (2022: € 34 million) and is recognized in the financial expenses.