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Note 21 - Non-current assets and disposal groups classified as held for sale | 12 Months Ended
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Dec. 31, 2020
Non-current assets and disposal groups classified as held for sale Abstract |
Non-Current Assets and Disposal Groups Classified as Held for Sale. Breakdowm By Items | 21. Non-current assets and disposal groups classified as held for sale and liabilities included in disposal groups classified as held for sale The composition of the balances under the headings “Non-current assets and disposal groups classified as held for sale” and “liabilities included in disposal groups classified as held for sale” in the accompanying consolidated balance sheets, broken down by the origin of the assets, is as follows:
Non-current assets and disposal groups classified as held for sale. Breakdown by items (Millions of Euros)
| 2020 | 2019 | 2018
Foreclosures and recoveries (*) | 1.398 | 1.647 | 2.210
Assets from tangible assets | 480 | 310 | 433
Companies held for sale (**) | 84.792 | 1.716 | 29
Accrued amortization (***) | (89) | (51) | (44)
Impairment losses | (594) | (543) | (628)
Total non-current assets and disposal groups classified as held for sale | 85.987 | 3.079 | 2.001
Companies held for sale (**) | 75.446 | 1.554 | -
Total liabilities included in disposal groups classified as held for sale | 75.446 | 1.554 | -
(*) 2018 figures correspo nd mainly to the agreement with Cerberus to transfer the "Real Estate" business in Spain (see Note 3). (**) 2020 figures correspond mainly to the sale of BBVA´s stake in BBVA USA (see Note 3). 2019 figures correspond mainly to the BBVA´s stake in BBV A Paraguay (see Note 3). (***) Corresponds to the accumulated depreciation of assets before their classification as "Non-current assets and disposal groups classified as held for sale". Assets and liabilities from discontinued operations As mentioned in Note 3, in 2020 the agreement for the sale of the BBVA subsidiary in the United States was announced. The assets and liabilities corresponding to the companies for sale were reclassified to the headings “Non-current assets and disposal groups classified a s held for sale” and “Liabilities included in disposal grou ps classified as held for sale” of the consolidated balance sheet as of December 31, 2020; and the earnings of these companies for the years ended December 31, 2020, 2019 and 2018 were classified u nder the heading "Profit (loss) after tax from discontinued operations" of the accompanying consolidated income statements (see Note 1.3). The condensed consolidated balance sheets, condensed consolidated income statements and condensed consolidated state ments of cash flow of the companies for sale in the United States subsidiary for the years 2020, 2019 and 2018 are provided below: Condensed balance sheet s of companies held for sale in the United States subsidiary as of December 31, 2020, 2019 and 2018
CONDENSED ASSETS (Millions of Euros)
|  | 2020 | 2019 | 2018
Cash, cash balances at central banks and other demand deposits |  | 11.368 | 5.678 | 2.326
Financial assets held for trading |  | 821 | 513 | 228
Non-trading financial assets mandatorily at fair value through profit or loss |  | 13 | 18 | 18
Financial assets at fair value through other comprehensive income |  | 4.974 | 6.834 | 10.030
Financial assets at amortized cost |  | 61.558 | 62.860 | 59.302
Derivatives - hedge accounting |  | 9 | 10 | 23
Tangible assets |  | 799 | 900 | 665
Intangible assets |  | 1.949 | 4.183 | 5.438
Tax assets |  | 360 | 263 | 446
Other assets |  | 1.390 | 1.463 | 1.401
Non-current assets and disposal groups classified as held for sale |  | 16 | 31 | 30
TOTAL ASSETS |  | 83.257 | 82.751 | 79.908
CONDENSED LIABILITIES (Millions of Euros)
|  | 2020 | 2019 | 2018
Financial liabilities held for trading |  | 98 | 94 | 114
Financial liabilities at amortized cost |  | 73.132 | 70.438 | 66.635
Derivatives - hedge accounting |  | 2 | 11 | 21
Provisions |  | 157 | 186 | 172
Tax liabilities |  | 201 | 87 | 249
Other liabilities |  | 492 | 464 | 497
TOTAL LIABILITIES |  | 74.082 | 71.279 | 67.688
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Millions of Euros)
|  | 2020 | 2019 | 2018
Actuarial gains (losses) on defined benefit pension plans |  | (66) | (80) | (69)
Hedge of net investments in foreign operations (effective portion) |  | (432) | (432) | (432)
Foreign currency translation |  | 801 | 1.576 | 1.337
Hedging derivatives. Cash flow hedges (effective portion) |  | 250 | 81 | 5
Fair value changes of debt instruments measured at fair value through other comprehensive income |  | 70 | (11) | (130)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |  | 622 | 1.134 | 710
Condensed income statement s of companies held for sale in the United States subsidiary for the years ended December 31, 2020, 2019 and 2018
CONDENSED INCOME STATEMENTS (Millions of Euros)
|  | 2020 | 2019 | 2018
Interest and other income |  | 2.638 | 3.221 | 2.797
Interest expense |  | (429) | (887) | (570)
NET INTEREST INCOME |  | 2.209 | 2.335 | 2.227
Dividend income |  | 4 | 10 | 13
Fee and commission income |  | 677 | 736 | 670
Fee and commission expense |  | (183) | (205) | (194)
Gains (losses) on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net |  | 19 | 54 | 25
Gains (losses) on financial assets and liabilities held for trading, net |  | 90 | 30 | 66
Gains (losses) on non-trading financial assets mandatorily at fair value through profit or loss, net |  | 8 | - | -
Gains (losses) on financial assets and liabilities designated at fair value through profit or loss, net |  | 5 | 3 | 3
Gains (losses) from hedge accounting, net |  | 4 | 4 | 3
Exchange differences, net |  | 19 | 5 | (22)
Other operating income |  | 19 | 32 | 20
Other operating expense |  | (63) | (64) | (79)
GROSS INCOME |  | 2.808 | 2.941 | 2.731
Administration costs |  | (1.462) | (1.534) | (1.474)
Depreciation and amortization |  | (205) | (214) | (174)
Provisions or reversal of provisions |  | 2 | (3) | 22
Impairment or reversal of impairment on financial assets not measured at fair value through profit or loss or net gains by modification |  | (729) | (521) | (221)
NET OPERATING INCOME |  | 413 | 670 | 884
Impairment or reversal of impairment on non-financial assets |  | (2.084) | (1.318) | (1)
Gains (losses) on derecognition of non-financial assets and subsidiaries, net |  | (3) | 2 | (2)
Gains (losses) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations |  | 2 | (2) | -
PROFIT (LOSS) BEFORE TAX FROM CONTINUING OPERATIONS |  | (1.671) | (648) | 881
Tax expense or income related to profit or loss from continuing operations |  | (57) | (110) | (177)
PROFIT (LOSS) AFTER TAX FROM CONTINUING OPERATIONS |  | (1.729) | (758) | 704
PROFIT (LOSS) FOR THE PERIOD |  | (1.729) | (758) | 704
ATTRIBUTABLE TO OWNERS OF THE PARENT |  | (1.729) | (758) | 704
Condensed statements of cash flows of companies held for sale in the United States subsidiary for the years ended December 31, 2020, 2019 and 2018
CONDENSED STATEMENTS OF CASH FLOWS (Millions of Euros)
|  | 2020 | 2019 | 2018
A) CASH FLOWS FROM OPERATING ACTIVITIES |  | 6.874 | 3.888 | (228)
B) CASH FLOWS FROM INVESTING ACTIVITIES |  | (145) | (133) | (123)
C) CASH FLOWS FROM FINANCING ACTIVITIES |  | (65) | (468) | (256)
D) EFFECT OF EXCHANGE RATE CHANGES |  | (974) | 65 | 84
(INCREASE/DECREASE) NET CASH AND CASH EQUIVALENTS (A+B+C+D) |  | 5.690 | 3.352 | (522)
Non-current assets and disposal groups classified as held for sale The changes in the balances of “Non-current assets and disposal groups classified as held for sale” in 2020, 2019 and 2018 are as follows:
Non-current assets and disposal groups classified as held for sale. Changes in the year 2020 (Millions of Euros)
| Notes | Foreclosed assets | Property, Plant and Equipment (*) | Companies held for sale (**) | Total
Cost (1) |  |  |  |  |
Balance at the beginning |  | 1.648 | 258 | 1.716 | 3.622
Additions |  | 285 | - | 83.266 | 83.551
Retirements (sales and other decreases) |  | (288) | (45) | (190) | (523)
Transfers, other movements and exchange differences (**) |  | (228) | 180 | - | (48)
Disposals by companies held for sale |  | (19) | (2) | - | (21)
Balance at the end |  | 1.398 | 391 | 84.792 | 86.581
Impairment (2) |  |  |  |  |
Balance at the beginning |  | 411 | 132 | - | 543
Additions | 50 | 74 | 29 | - | 103
Retirements (sales and other decreases) |  | (56) | (13) | - | (69)
Other movements and exchange differences |  | (42) | 60 | - | 18
Disposals by companies held for sale |  | (1) | - | - | (1)
Balance at the end |  | 386 | 208 | - | 594
Balance at the end of net carrying value (1)-(2) |  | 1.012 | 183 | 84.792 | 85.987
(*) Net of accumulated amortization until assets were reclassified as “Non-current assets and disposal groups classified as held for sale” (** ) The variation corresponds mainly to the agreement for the sale of BBVA USA (see Note 3).
Non-current assets and disposal groups classified as held for sale. Changes in the year 2019 (Millions of Euros)
| Notes | Foreclosed assets | Property, Plant and Equipment (*) | Companies held for sale (**) | Total
Cost (1) |  |  |  |  |
Balance at the beginning |  | 2.211 | 389 | 29 | 2.629
Additions |  | 665 | 10 | 1.676 | 2.351
Contributions from merger transactions |  | 2 | - | - | 2
Retirements (sales and other decreases) |  | (1.023) | (206) | - | (1.229)
Transfers, other movements and exchange differences (**) |  | (207) | 65 | 11 | (131)
Balance at the end |  | 1.648 | 258 | 1.716 | 3.622
Impairment (2) |  |  |  |  |
Balance at the beginning |  | 504 | 124 | - | 628
Additions | 50 | 67 | 5 | - | 72
Additions transfer to discontinued operations |  | 5 | - | - | 5
Retirements (sales and other decreases) |  | (164) | (22) | - | (186)
Other movements and exchange differences |  | (1) | 25 | - | 24
Balance at the end |  | 411 | 132 | - | 543
Balance at the end of net carrying value (1)-(2) |  | 1.237 | 126 | 1.716 | 3.079
(*) Net of accumulated amortization until assets were reclassified as “Non-current assets and disposal groups classified as held for sale” (** ) The variation corresponds mainly to the BBVA’s stake in BBVA Paraguay (see Note 3).
Non-current assets and disposal groups classified as held for sale. Changes in the year 2018 (Millions of Euros)
| Notes | Foreclosed assets | From own use assets (*) | Companies held for sale (**) | Total
Cost (1) |  |  |  |  |
Balance at the beginning |  | 6.207 | 371 | 18.623 | 25.201
Additions |  | 692 | 4 | - | 696
Retirements (sales and other decreases) |  | (4.489) | (227) | (18.594) | (23.310)
Transfers, other movements and exchange differences (**) |  | (199) | 241 | - | 42
Balance at the end |  | 2.211 | 389 | 29 | 2.629
Impairment (2) |  |  |  |  |
Balance at the beginning |  | 1.154 | 194 | - | 1.348
Additions | 50 | 204 | 2 | - | 206
Additions transfer to discontinued operations |  | 2 | - | - | 2
Retirements (sales and other decreases) |  | (830) | (101) | - | (931)
Other movements and exchange differences |  | (26) | 29 | - | 3
Balance at the end |  | 504 | 124 | - | 628
Balance at the end of net carrying value (1)-(2) |  | 1.707 | 265 | 29 | 2.001
(*) Net of accumulated amortization unt il assets were reclassified as “Non-current assets and disposal groups classified as held for sale” (** ) The variation corresponds mainly to the BBVA’s stake in BBVA Chile and the agreement with Cerberus to transfer the "Real Estate" business in Spain (see Note 3). As indicated in Note 2.2.4, “Non-current assets and disposal grou ps held for sale” and “Liabilities included in disposal groups classified as held for sale” are valued at the lower amount between its fair value less costs to sell and its carrying amount. As of December 31, 2020, 2019 and 2018 practically all of the carrying amount of the assets recorded at fair value on a non-recurring basis coincides with their fair value. Assets from foreclosures or recoveries As of December 31, 2020, 2019 and 2018, assets from foreclosures and recoveries, net of impairment losses, by nature of the asset, amounted to €747, €871 and €1,072 million in assets for residential use; €215, €259 and €182 million in assets for tertiary use (industrial, commercial or office) and €21, €28 and €19 million in assets for agricultural use, respect ively. In December 31, 2020, 2019 and 2018, the average sale time of assets from foreclosures or recoveries was between 2 and 3 years. During the years 2020, 2019 and 2018, some of the sale transactions for these assets were financed by Group companies. Th e amount of loans granted to the buyers of these assets in those years amounted to €78, €79 and €82 million, respectively; with an average financing of 28.3% of the sales price during 2020. As of December 31, 2020, 2019 and 2018, the amount of the profits arising from the sale of assets financed by Group companies that are not recognized in the consolidated income statement amounted to €1 million.

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