3.7 Investments in joint ventures and associates
Accounting policies
An associate is an entity over which PostNL has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint arrangement is an arrangement of which two or more parties have joint control. There are two types of joint arrangements: joint operations and joint ventures. PostNL only participates in entities that can be considered as a joint venture.
PostNL’s share in the results of joint ventures and associates is included in the consolidated income statement using the equity method. The carrying value of PostNL’s share in joint ventures and associates includes goodwill on acquisition and includes changes to reflect PostNL’s share in net earnings of the respective companies, reduced by dividends received. When PostNL’s share of accumulated losses in a joint venture or associate exceeds its interest in the company, the book value of the investment is reduced to zero and PostNL does not recognise further losses unless PostNL is bound by guarantees or other undertakings in relation to the joint venture or associate.
For the accounting policy concerning impairments, reference is made to note 5.4.
The following table presents the changes in the carrying value of the investments in joint ventures and associates.
PostNL Investments in joint ventures and associates in € million
2022, 2023
| 2022 | 2023 | |
|---|---|---|
| Balance at 1 January | 6 | 7 |
| Share in net result | (1) | (1) |
| Impairments | (3) | |
| Additions | 2 | 3 |
| Balance at 31 December | 7 | 6 |
As at 31 December 2023, the investments in associates mainly related to minority shareholdings in CB Healthcare and the OK-app within Parcels. The joint ventures mainly related to the 50% interest in De Innovatie Studio within PostNL Other.
In 2023, the additions of €3 million related to the expansion of the shareholding in the OK-app, a shopping service app, to 21.9% of the shares. The impairments of €(3) million related to the write-down of the shareholdings in Roamler Care and VersTrade Nederland which ceased operations.
In 2022, the additions of €2 million related to the acquisition of 50% of the shares of De Innovatie Studio, 5.3% of the shares in the OK-app, a shopping services app (with the aim to expand our stake to 20% in the short term) and an additional capital contribution in Roamler Care. De Innovatie Studio is a collaboration with Dasym with the goal to create solutions to relevant consumer problems around Smart Living.
Management has assessed none of the investments in joint ventures and associates to be material to the company. On a 100% basis, the profit/(loss) of all immaterial investments in joint ventures amounted to €0 million (2022: €0 million). The profit/(loss) of all immaterial investments in associates amounted to €(4) million (2022: €(4) million).