28 Finance costs (XLS:) Download millions of € 2019 2018 2017 a Interest expense calculated according to the effective interest method and adjusted for accrued interest from derivatives recognized in the reporting year that were used as hedging instruments against interest rate-based changes in the fair values of financial liabilities measured at amortized cost in the reporting year for hedge accounting in accordance with IFRS 9 (2019: interest income of EUR 297 million and interest expense of EUR 54 million; 2018: interest income of EUR 223 million and interest expense of EUR 110 million; 2017: interest income of EUR 260 million and interest expense of EUR 165 million). Interest income 348 277 320 Interest expense (2,712) (2,094) (2,517) (2,364) (1,817) (2,197) Of which: from leases (870) n.a. n.a. Of which: from finance leases n.a. (131) (133) Of which: from financial instruments relating to measurement categories in accordance with IFRS 9 Debt instruments measured at amortized cost 23 27 n.a. Debt instruments measured at fair value through other comprehensive income 0 0 n.a. Debt instruments measured at fair value through profit or loss 14 10 n.a. Financial liabilities measured at amortized costa (2,011) (1,707) n.a. Of which: from financial instruments relating to measurement categories in accordance with IAS 39 Loans and receivables (LaR) n.a. n.a. 32 Held-to-maturity investments (HtM) n.a. n.a. 0 Available-for-sale financial assets (AfS) n.a. n.a. 15 Financial liabilities measured at amortized cost (FLAC)a n.a. n.a. (2,091) The increase in finance costs is attributable in particular to the subsequent measurement of recognized lease liabilities since the first-time application of IFRS 16. This effect increased finance costs by EUR 0.9 billion in the reporting year. Favorable refinancing terms had a reducing effect on finance costs compared with the prior year. In 2018, the Consent Fee of EUR 0.1 billion paid (or still payable) to lending banks in connection with the probable increase in the admissible amount of collateralized financing instruments at T‑Mobile US as a consequence of the agreed business combination with Sprint had an increasing effect on finance costs. EUR 343 million (2018: EUR 290 million; 2017: EUR 176 million) was capitalized as part of acquisition costs in the financial year. The increase mainly relates to investments in the United States operating segment. The amount was calculated on the basis of an interest rate in the average range between 3.5 percent at the start of the year and 3.2 percent at the end of the year (2018: between 3.9 and 3.5 percent) applied across the Group. Interest payments (including capitalized interest) of EUR 4.3 billion (2018: EUR 3.6 billion, 2017: EUR 4.0 billion) were made in the financial year. Accrued interest payments from derivatives (interest rate swaps) that were designated as hedging instruments in a fair value hedge in accordance with IFRS 9 are netted per swap contract and recognized as interest income or interest expense depending on the net amount. Finance costs are assigned to the measurement categories on the basis of the hedged item. Only financial liabilities were hedged in the reporting period.
