BP 2010 Annual Report Download - page 196

Notesonnancialstatements
34.Derivativenancialinstrumentscontinued
Thefollowingtableshowsthechangesintheday-oneprotsandlossesdeferredonthebalancesheet.
 $million
 2010  2009
           Natural  Natural
          Oil price gas price Oilprice gasprice
Fairvalueofcontractsnotrecognizedthroughtheincomestatementat1January   21 33  32 83
Fairvalueofnewcontractsatinceptionnotrecognizedintheincomestatement   – 39  – (14)
Fairvaluerecognizedintheincomestatement     (21) (3) (11) (36)
Fairvalueofcontractsnotrecognizedthroughprotat31December    – 69  21 33
 
Thefollowingtableshowsthefairvalueofderivativeassetsandderivativeliabilitiesheldfortrading,analysedbymaturityperiodandbymethodologyoffair
valueestimation.
 IFRS7‘FinancialInstruments:Disclosures’setsoutafairvaluehierarchywhichconsistsofthreelevelsthatdescribethemethodologyofestimation
asfollows:
 Level1–usingquotedpricesinactivemarketsforidenticalassetsorliabilities.
 Level2–usinginputsfortheassetorliability,otherthanquotedprices,thatareobservableeitherdirectly(i.e.asprices)orindirectly
(i.e.derivedfromprices).
 Level3–usinginputsfortheassetorliabilitythatarenotbasedonobservablemarketdatasuchaspricesbasedoninternalmodelsorother
valuationmethods.
Thisinformationispresentedonagrossbasis,thatis,beforenettingbycounterparty.
 $million
 2010
Less than Over
1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total
Fairvalueofderivativeassets       
 Level1   122 36 12 5 – – 175
 Level2   7,132 1,928 639 239 109 – 10,047
 Level3   341 314 296 267 165 410 1,793
  7,595 2,278 947 511 274 410 12,015
Less:nettingbycounterparty  (3,694) (884) (160) (50) (21) (2) (4,811)
     3,901 1,394 787 461 253 408 7,204
Fairvalueofderivativeliabilities
 Level1   (239) (6) (46) – – – (291)
 Level2   (6,733) (1,685) (617) (107) (44) – (9,186)
 Level3   (205) (148) (125) (114) (92) (279) (963)
  (7,177) (1,839) (788) (221) (136) (279) (10,440)
Less:nettingbycounterparty  3,694 884 160 50 21 2 4,811
     (3,483) (955) (628) (171) (115) (277) (5,629)
Netfairvalue  418 439 159 290 138 131 1,575

 $million
          2009
       Lessthan     Over
       1year 1-2years 2-3years 3-4years 4-5years 5years Total
Fairvalueofderivativeassets
 Level1   163 76 23 17 10 1 290
 Level2   9,544 2,182 915 357 146 – 13,144
 Level3   264 188 162 148 128 527 1,417
     9,971 2,446 1,100 522 284 528 14,851
Less:nettingbycounterparty  (5,494) (1,029) (384) (75) (35) (11) (7,028)
     4,477 1,417 716 447 249 517 7,823
Fairvalueofderivativeliabilities
 Level1   (95) (39) (14) (24) – (1) (173)
 Level2   (9,086) (1,681) (597) (234) (47) – (11,645)
 Level3   (269) (150) (109) (93) (74) (436) (1,131)
     (9,450) (1,870) (720) (351) (121) (437) (12,949)
Less:nettingbycounterparty  5,494 1,029 384 75 35 11 7,028
     (3,956) (841) (336) (276) (86) (426) (5,921)
Netfairvalue  521 576 380 171 163 91 1,902

194BPAnnualReportandForm20-F2010