Page 167 - KELAG Annual Report 2019

Wherever possible, KELAG uses data observable on the market to determine the fair value of an
asset or liability. Based on the input factors used in the measurement techniques, the fair values
are classified in the following fair value hierarchy:

 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.

1 Listed securities Market-based Nominal values, listed values
1 Listed energy forwards Market-based Quoted value
Payments associated with the financial
2 Unlisted debt securities Income-based
instruments, yield curve, credit risk
Forward price curve derived from quoted
2 Unlisted energy forwards Income-based prices, yield curve, credit risk of the
contracting partner
Cash flows already fixed or determined
2 Unlisted interest rate hedging instruments Income-based using forward rates, yield curve, credit risk
of the contracting partner (CVA/DVA)
Measurement of contingent purchase
3 Income-based Dependent on contractual agreements
price components pursuant to IFRS 3
Purchase option for shares in Fiorentina
3 Income-based Dependent on contractual agreements
s.r.l.
For each immaterial investment still
remaining under this item, an assumption is
- Other investments - made that their acquisition cost is an
appropriate representation of fair value
(see IFRS 9.B5.2.3).
Cash and cash equivalents, trade
receivables and trade payables, current
- other receivables, other cash received as - Carrying amounts as a realistic estimate of
fair value
part of current borrowings and current
other liabilities

The changes to the trading strategy at the beginning of 2019 resulted in a greater level of long-
term contracts to supply electricity and gas being accounted for as derivatives in accordance with
IFRS 9. As these contracts generally serve to hedge future purchases and sales as part of KELAG’s
risk management strategy, a large portion of these was designated as hedging instruments for
hedge accounting. The contracts not designated for hedge accounting are measured at fair value
through profit or loss in accordance with the normal rules on derivatives.