Page 167 - KELAG Annual Report 2019
P. 167

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
                                                                           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.
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