17 - Long term borrowings

Accounting policies

Initial recognition and measurement

Loans and borrowings are recognized initially at fair value, net of directly attributable transaction costs.

Subsequent measurement

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the Effective Interest Rate (“EIR”) method. Gains and losses are recognized in the profit or loss upon the derecognition of liabilities and during the EIR amortization process.

The calculation of amortized cost takes into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit or loss.

Derecognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

Long-term borrowings (including long and short term lease liabilities) consist of the following items (In € 1,000):

Borrowing terms

The loan obtained from the shareholder does not adhere to a set repayment schedule. Instead, repayment periods are agreed upon periodically, depending on the cash flows generated by the Group.

Reconciliation of cash flows financing activity