4. Other financial information

This section provides details of the various commitments and contingencies as well as information about the associated companies, the acquisitions, and the legal subsidiaries including the Group companies' shareholdings.

4.1 Commitments and contingencies

Lease commitments

Operating lease payments are charged to income (CHF 36.0 million in 2019/20 and CHF 40.5 million in 2018/19) on a straight-line basis over the lease term. The following table shows the future minimum lease payments resulting from non-cancellable operating leases:

CHF million	Financial year ended 30.06.2020	Financial year ended 30.06.2019
Future payment commitments for operating leases	118.8	130.0
Up to 1 year	34.2	33.3
2 to 5 years	62.7	74.1
Over 5 years	21.9	22.6

Operating lease commitments mainly refer to the lease of buildings used for operational purposes.

Accounting principles

Operating lease agreements are lease agreements that do not qualify as finance leases and are not capitalized in the balance sheet.

Other commitments and contingencies

CHF million	Financial year ended 30.06.2020	Financial year ended 30.06.2019
Current endorsement liabilities	2.1	3.7
Investments committed to purchase from third parties:
Property, plant, and equipment	5.5	13.4
Intangible assets	1.5	0.6

4.2 Equity accounted investments

CHF million	Financial year ended 30.06.2020	Financial year ended 30.06.2019
Investments in associates - 30 June	3.3	3.5
Increase of investments in associates	0.0	1.5
Sale of investments in associates	0.0	–37.7
Share of profit (loss)	–0.2	–0.3
Translation exchange differences	0.0	–0.6
Investments in associates - 1 July	3.5	40.6
Result from associates	–0.2	2.9
Share of profit (loss)	–0.2	–0.3
Profit from sale of investments in associates	0.0	3.2

Accounting principles

Investments in associates and joint ventures where dormakaba Group exercises significant influence but does not have control (i.e. usually an interest between 20% and 50%) are accounted for using the equity method of accounting. Under the equity method, investments in associated companies and joint ventures are initially recognized at cost, and the carrying amount is increased or decreased to recognize dormakaba Group’s share of the profit or loss of the associate/joint venture after the date of acquisition. Profit and loss are attributed to the owners of the parent and to the minority interests, even if this results in a negative balance. Investments in which dormakaba Group does not have significant influence (i.e. dormakaba Group’s interest is usually less than 20%) are recorded at cost.

4.3 Business combinations

The following table summarizes all considerations paid for businesses, as well as the assets and liabilities acquired and recognized at fair value as at the acquisition date for the full financial year 2019/20 and for the full financial year 2018/19 in comparison.

CHF million			Financial year ended 30.06.2020	Financial year ended 30.06.2019
	Alvarado	Others	Total	Total
Total consideration	159.6	1.7	161.3	6.6
Cash paid	158.0	1.1	159.1	6.2
Deferred payment	0.7	0.6	1.3	0.1
Acquisition-related costs	0.9	0.0	0.9	0.3
Identifiable assets and liabilities	23.8	0.1	23.9	0.4
Cash and cash equivalents	16.8	0.0	16.8	0.4
Trade receivables	4.1	0.1	4.2	0.7
Inventories	5.3	0.0	5.3	0.3
Current income tax assets	1.8	0.0	1.8	0.0
Other current assets	0.2	0.0	0.2	0.0
Property, plant, and equipment	0.4	0.1	0.5	0.2
Deferred income tax assets	0.2	0.0	0.2	0.0
Trade payables	–0.3	–0.1	–0.4	–0.3
Current income tax liabilities	0.0	0.0	0.0	–0.1
Accrued and other current liabilities	–4.6	0.0	–4.6	–0.5
Provisions	–0.1	0.0	–0.1	0.0
Non-current borrowings	0.0	0.0	0.0	–0.3
Goodwill	135.8	1.6	137.4	6.2

Alvarado Manufacturing Co. Inc.

On 27 June 2019, dormakaba signed an agreement to acquire Alvarado Manufacturing Co. Inc., based in Chino (CA/USA). The transaction was closed on 31 July 2019. Alvarado is a leading manufacturer of physical access solutions in North America such as speed gates, turnstiles, and other admission devices with a focus on office, commercial and government buildings, as well as sports, leisure and entertainment facilities.

Accounting principles

Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquired entity and the book value as at the acquisition date of any previous equity interest in the acquired entity over the fair value of the Group’s share of the identifiable net assets acquired. Only intangible assets purchased separately are recognized as part of an acquisition. The positive or negative goodwill resulting from acquisitions is offset in equity at the date of acquisition against retained earnings.

If the purchase price contains elements that are dependent on future results, they are estimated as accurately as possible at the date of acquisition and recognized in the balance sheet. In the event of any disparities when the definitive purchase price is settled, the goodwill offset in equity is adjusted accordingly. The consequences of a theoretical capitalization and amortization of goodwill are explained in the note on the theoretical equity and goodwill movement (3.4).