8.Sales

Net sales are categorized according to “geographical regions and key countries” and mainly comprise sales from contracts with customers and an insignificant amount of rental and leasing sales. The table also contains a breakdown of sales by reportable segments.

Disaggregation of sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other/Consolidation

 

 

 

 

Polyurethanes

 

Polycarbonates

 

Coatings, Adhesives, Specialties

 

All other segments

 

Corporate Center and reconciliation

 

Covestro Group

 

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

 

€ million

2020

 

 

 

 

 

 

 

 

 

 

 

 

EMLA

 

2,189

 

942

 

908

 

561

 

 

4,600

of which Germany

 

405

 

198

 

394

 

345

 

 

1,342

NAFTA

 

1,389

 

610

 

469

 

86

 

 

2,554

of which United States

 

1,108

 

508

 

428

 

84

 

 

2,128

APAC

 

1,443

 

1,433

 

662

 

14

 

 

3,552

of which China

 

899

 

998

 

349

 

4

 

 

2,250

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

EMLA

 

2,487

 

1,146

 

1,052

 

604

 

 

5,289

of which Germany

 

471

 

271

 

448

 

367

 

 

1,557

NAFTA

 

1,680

 

734

 

562

 

165

 

 

3,141

of which United States

 

1,336

 

597

 

507

 

164

 

 

2,604

APAC

 

1,612

 

1,593

 

755

 

22

 

 

3,982

of which China

 

997

 

1,076

 

378

 

5

 

 

2,456

The following table presents the opening and closing balances of trade accounts receivable, contract assets, and contract liabilities:

Contract balances

 

 

 

 

 

 

 

 

 

Jan. 1,
2019

 

Dec. 31,
2019

 

Dec. 31,
2020

 

 

€ million

 

€ million

 

€ million

Trade accounts receivable

 

1,786

 

1,561

 

1,593

Contract assets

 

52

 

43

 

43

Contract liabilities

 

28

 

18

 

22

Contract assets are recognized in case the right to consideration in exchange for goods or services that have been transferred to a customer is conditional. This occurs primarily in the event of goods delivered to consignment warehouses of external customers. Where sales are made through consignment warehouses, customers primarily obtain control over the delivered goods upon delivery to the consignment warehouse. Contract assets are recognized as receivables upon invoicing. 

Contract liabilities are recognized for advance payments received from customers prior to transferring goods or services. These contract liabilities are recognized as sales when the goods or services have been transferred.

Sales from performance obligations satisfied (or partially satisfied) in previous periods and recognized in fiscal 2020 amounted to €2 million (previous year: €5 million).

The changes in contract assets and contract liabilities in the reporting period resulted from the following circumstances:

Reconciliation of contract assets

 

 

 

 

 

 

 

2019

 

2020

 

 

€ million

 

€ million

Transfers from contract assets recognized at the beginning of the period to trade accounts receivable

 

(51)

 

(40)

Increases due to performance obligations fulfilled but not billed at the reporting date

 

39

 

43

Catch-up adjustments to revenue that affect the corresponding contract asset

 

3

 

(3)

Total

 

(9)

 

Reconciliation of contract liabilities

 

 

 

 

 

 

 

2019

 

2020

 

 

€ million

 

€ million

Revenue recognized that was included in the contract liability balance at the beginning of the period

 

(28)

 

(18)

Increases due to cash received, excluding amounts recognized as revenue during the period

 

18

 

22

Catch-up adjustments to revenue that affect the corresponding contract liability

 

 

Total

 

(10)

 

4

The following table provides the transaction price allocated to the remaining performance obligations as of the balance sheet date. The total amount is divided according to the reporting period when it is expected to be recognized:

Transaction price allocated to the remaining performance obligations

 

 

 

 

 

 

 

 

 

 

 

Dec. 31, 2019

 

 

 

 

 

Dec. 31, 2020

 

 

€ million

 

 

 

 

 

€ million

2020

 

448

 

 

 

2021

 

648

2021

 

386

 

 

 

2022

 

633

2022

 

426

 

 

 

2023

 

465

2023

 

283

 

 

 

2024

 

323

2024

 

182

 

 

 

2025

 

102

2025 or later

 

83

 

 

 

2026 or later

 

155

Total

 

1,808

 

 

 

Total

 

2,326

The disclosures on the transaction price allocated to the remaining performance obligations is based on long-term supply contracts according to  15 (Revenue from Contract with Customers) which stipulate minimum volumes to be purchased as agreed between both parties.

Performance obligations from contracts with an original expected term of twelve months or less are excluded. Similarly, the disclosure of the transaction price excludes performance obligations satisfied over time for which Covestro has the right to consideration in an amount that corresponds directly with the value to the customer of the performance completed to date and for which Covestro may recognize revenue in the amount to which Covestro has the right to invoice.

The transaction price only includes variable consideration arising from contracts with customers, like sales- or volume-based rebates or price formulas, for which the prices are derived from external, market based indices, to the extent that they are not constrained as defined in IFRS 15.

IFRSs/International Financial Reporting Standards
International accounting standards as endorsed by the European Union respectively published by the IASB or the IFRS IC