6.Sales

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

 

 

 

 

 

 

 

 

 

 

 

Performance Materials

 

Solutions & Specialties

 

Others/ Consolidation

 

Covestro Group

 

 

€ million

 

€ million

 

€ million

 

€ million

2021

 

 

 

 

 

 

 

 

EMLA

 

3,878

 

2,835

 

163

 

6,876

of which Germany

 

978

 

843

 

97

 

1,918

NA

 

1,926

 

1,594

 

33

 

3,553

of which United States

 

1,620

 

1,313

 

29

 

2,962

APAC

 

2,338

 

3,125

 

11

 

5,474

of which China

 

1,572

 

1,969

 

3

 

3,544

 

 

 

 

 

 

 

 

 

2020

 

 

 

 

 

 

 

 

EMLA

 

2,572

 

1,894

 

134

 

4,600

of which Germany

 

657

 

624

 

61

 

1,342

NA

 

1,347

 

1,175

 

32

 

2,554

of which United States

 

1,156

 

942

 

30

 

2,128

APAC

 

1,549

 

1,991

 

12

 

3,552

of which China

 

993

 

1,252

 

5

 

2,250

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

Contract balances

 

 

 

 

 

 

 

 

 

Jan. 1, 2020

 

Dec. 31, 2020

 

Dec. 31, 2021

 

 

€ million

 

€ million

 

€ million

Trade accounts receivable

 

1,561

 

1,593

 

2,343

Contract assets

 

43

 

43

 

62

Contract liabilities

 

18

 

22

 

37

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 trade accounts receivable 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 2021 amounted to €2 million (previous year: €2 million).

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

Reconciliation of contract assets

 

 

 

 

 

 

 

2020

 

2021

 

 

€ million

 

€ million

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

 

(40)

 

(43)

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

 

43

 

62

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

 

(3)

 

Business combination

 

 

Total

 

 

19

Reconciliation of contract liabilities

 

 

 

 

 

 

 

2020

 

2021

 

 

€ million

 

€ million

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

 

(18)

 

(22)

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

 

22

 

36

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

 

 

Business combination

 

 

1

Total

 

4

 

15

The following table provides the transaction price allocated to the remaining performance obligations as of 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, 2020

 

 

 

 

 

Dec. 31, 2021

 

 

€ million

 

 

 

 

 

€ million

2021

 

648

 

 

 

2022

 

1,028

2022

 

633

 

 

 

2023

 

885

2023

 

465

 

 

 

2024

 

696

2024

 

323

 

 

 

2025

 

505

2025

 

102

 

 

 

2026

 

574

2026 or later

 

155

 

 

 

2027 or later

 

73

Total

 

2,326

 

 

 

Total

 

3,761

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 12 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