5 Non-current assets and disposal groups held for sale and liabilities directly associated with non-current assets and disposal groups held for sale

As of December 31, 2020, current assets recognized in the consolidated statement of financial position included EUR 1.1 billion (December 31, 2019: EUR 0.1 billion) in non-current assets and disposal groups held for sale. Current liabilities in the consolidated statement of financial position included liabilities directly associated with non-current assets and disposal groups held for sale of EUR 0.4 billion as of December 31, 2020 (December 31, 2019: EUR 29 billion). The increase in the carrying amounts of assets and liabilities resulted from the transactions described below. Real estate in the Group Headquarters & Group Services segment was sold in 2019.

As of December 31, 2020, the carrying amounts include the reclassified assets and liabilities of Telekom Romania Communications S.A. (TKR), which operates the Romanian fixed-network business in the Europe operating segment. They also include the assets and liabilities of the Dutch company T‑Mobile Infra B.V., which is assigned to the Group Development operating segment. Both these companies were classified as held for sale as of December 31, 2020 on account of the specific intention to sell them.

The assets and liabilities of both companies were measured at the lower of the carrying amount and fair value less costs of disposal. The recoverable amounts were determined on the basis of the sale agreements concluded with the contracting parties (Level 1 inputs). An expert opinion was obtained to determine the fair values of TKR’s individual assets. The agreed sale of TKR resulted in the course of the year in a reversal of impairment losses recognized in the past on property, plant and equipment of EUR 50 million.

For further information on the reversal of impairment losses, please refer to Note 7 “Property, plant and equipment.”

For further information on the two agreed transactions, please refer to the section “Changes in the composition of the Group and other transactions.”

On November 4, 2020, a transaction was agreed between T‑Mobile US and a competitor for the exchange of mobile spectrum licenses in order to improve mobile network coverage. The measurement uses parameters for which there are no observable market parameters (Level 3).

In addition, Deutsche Telekom AG’s real estate held for sale of EUR 2 million as of December 31, 2020 (December 31, 2019: EUR 6 million) was no longer recognized at its carrying amounts in accordance with IFRS 5, but at its fair value less costs of disposal. This real estate relates to sites that are no longer considered necessary for operations or that will, in the foreseeable future, no longer be considered necessary for operations on account of technological advances. The fair values are determined by external experts. The fair value is measured on a regular basis using the earnings value method, taking into account local market estimates and specific characteristics of the property, including input parameters that cannot be observed in the market (Level 3). The expected costs of disposal (currently usually around 10 % of the fair value) are subtracted. The real estate was written down by EUR 1 million (2019: EUR 5 million) to the fair value less costs of disposal. The expense was recognized under depreciation, amortization and impairment losses.

No reversals of impairments of the carrying amounts of the non-current assets and disposal groups held for sale were recognized either in the reporting year or in the prior year.