10 » Right-of-Use Assets
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, 2023 |
|
2,600 |
|
31 |
|
34 |
|
2,665 |
Additions |
|
307 |
|
7 |
|
21 |
|
335 |
Disposals |
|
(79) |
|
(7) |
|
(0) |
|
(87) |
Depreciation |
|
(556) |
|
(14) |
|
(19) |
|
(590) |
Impairment losses |
|
(86) |
|
– |
|
– |
|
(86) |
Reversal of impairment losses |
|
29 |
|
– |
|
– |
|
29 |
Currency translation differences |
|
(71) |
|
(0) |
|
(1) |
|
(72) |
Other |
|
51 |
|
– |
|
1 |
|
52 |
December 31, 2023 |
|
2,195 |
|
17 |
|
36 |
|
2,247 |
|
|
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 |
Net change due to remeasurements |
|
3 |
|
– |
|
– |
|
3 |
December 31, 2022 |
|
2,600 |
|
31 |
|
34 |
|
2,665 |
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 (value in use) of the cash generating unit, as part of determining the profitability of adidas’ own retail stores, is calculated using the ‘discounted cash flow method.’
In 2023, impairment losses of € 86 million were recognized. Of those, € 65 million are related to the company’s own retail activities, for which, in contrast to expectations in the previous year, lower future economic benefits are expected, and € 23 million to a warehouse in EMEA, which was written down due to an early termination of the contract.
Impairment losses relating to retail stores are mainly attributable to EMEA with € 24 million, North America with € 20 million, Asia-Pacific with € 16 million and Greater China with € 7 million. Discount rates between 2.0% and 34.0% were used to calculate the impairment for the value in use. The recoverable amounts of adidas´ own retail stores break down into North America at € 253 million, Greater China at € 105 million, Asia-Pacific at € 83 million, EMEA at € 81 million, and Latin America at € 15 million.
In 2023, reversals of impairment losses of € 29 million were incurred. They mainly result from EMEA. The impairment losses and reversals of impairment losses were recognized in the other operating expenses.
The income from subleasing of right-of-use assets recognized in the consolidated income statement in 2023 amounts to € 2 million (2022: € 3 million).
Further information on total depreciation and amortization expenses, impairment losses and reversals of impairment losses is provided in these Notes. SEE NOTE 31