Chrysler 2008 Annual Report Download - page 158

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20. Current securities
Current securities consist of short-term or marketable securities which represent temporary investments, but which do not satisfy
all the requirements for being classified as cash equivalents. In particular:
(€ millions) At 31 December 2008 At 31 December 2007
Current securities available-for-sale 43 156
Current securities for trading 134 135
Total Current securities 177 291
21. Other financial assets and Other financial liabilities
These items include the measurement at fair value of derivative financial instruments at the balance sheet date.
In particular:
At 31 December 2008 At 31 December 2007
Positive Negative Positive Negative
(€ millions) fair value fair value fair value fair value
Fair value hedges:
- Interest rate risk - Interest rate swaps 198 (34) 110 ( 6 )
- Interest rate and currency risk - Combined interest rate and currency swaps 22 – 59 –
Total Fair value hedges 220 (34) 169 (6)
Cash flow hedges:
- Currency risks - Forward contracts, Currency swaps and Currency options 336 (735) 278 (65)
- Interest rate risk - Interest rate swaps 46 (220) 31 (62)
- Interest rate and currency risk - Combined interest rate and currency swaps 10 – 31 –
- Other derivatives –(6) –(2)
Total Cash flow hedges 392 (961) 340 (129)
Derivatives for trading 152 (207) 194 (53)
Other financial assets/(liabilities) 764 (1,202) 703 (188)
The fair value of derivative financial instruments is determined by taking into consideration market parameters at the balance
sheet date and using valuation techniques widely accepted in the financial business environment. In particular:
the fair value of forward contracts and currency swaps is determined by taking the prevailing exchange rate and interest rates
in the two currencies at the balance sheet date;
the fair value of currency options is determined using valuation techniques based on the Black-Scholes model or binomial models
and market parameters at the balance sheet date (in particular exchange rates, interest rates and volatility rates);
the fair value of interest rate swaps and forward rate agreements is determined by using the discounted cash flow method;
the fair value of derivative financial instruments acquired to hedge interest rate risk and currency risk is determined using the
exchange rates prevailing at the balance sheet date and the discounted cash flow method;
Fiat Group Consolidated Financial Statements at 31 December 2008 157