Liabilities

Liabilities consist of financial liabilities, trade accounts payable and other liabilities. Upon initial recognition, liabilities are stated at fair value including transaction costs. Liabilities from finance lease agreements are measured at the lower of fair value of the leased asset or present value of minimum lease payments. In the periods thereafter, liabilities (except for financial derivatives) are carried at amortized cost.

Deferred income and prepayments from customers are recognized as liabilities under other liabilities. Deferred income includes advances and contributions in aid of construction and building connection that are carried as liabilities by the utilities and which are generally amortized and included in income over the useful life of the corresponding asset. As a rule, this item also includes taxable and non-taxable government grants for capital expenditure on non-current assets, which are recognized as other operating income in line with the assets’ depreciation.

Certain minority interests are also presented under other liabilities. Specifically, this pertains to purchase price obligations from put options on minority interests that are recognized in accordance with IAS 32.