Page 95 - Annual Report KELAG Group 2018
P. 95

The fair value of the financial assets and liabilities is stated at the amount at which the instrument
                                      could be exchanged in a current transaction between willing parties, other than in a forced or
                                      liquidation sale.

                                      Unless otherwise stated, the fair value of certain assets and liabilities approximates their carrying
                                      amount on account of their short terms to maturity and the good credit rating of the KELAG Group
                                      (“A/stable”). The following methods and assumptions were used to determine the fair values:

                                          Non-current,  fixed-interest  receivables  and  loans  are  measured  by  the  Group  based  on
                                          parameters such as interest rates, country-specific risk factors, individual creditworthiness of the
                                          customer  and  the  risk  characteristics  of  the  financed  project.  Based  on  this  measurement,
                                          valuation adjustments are recognised to account for the expected losses of these receivables. As
                                          of the reporting date, the carrying amounts of such receivables, net of adjustments, were not
                                          materially different from their calculated fair values.
                                          Fair value of quoted notes and bonds is based on price quotations at the reporting date. The fair
                                          value of unquoted instruments, loans from banks and other financial liabilities as well as other
                                          non-current financial liabilities is estimated by discounting future cash flows using interest rates
                                          currently available for debt on similar terms, default risks and remaining terms to maturity.
                                          For more information on the measurement of derivative financial instruments relating to energy
                                          field and individual instruments used to hedge cash flows, please refer to the explanations on
                                          accounting policies.


                                      The KELAG Group uses the following hierarchy for determining and disclosing the fair value of
                                      financial instruments by valuation technique:


                                          Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
                                          Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
                                          value are observable, either directly or indirectly; and
                                          Level 3: techniques, which use inputs that have a significant effect on the recorded fair value that
                                          are not based on observable market data.
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