Kia 2012 Annual Report Download - page 103

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(ii) Interest rates used for determining fair value
The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the
reporting date plus an adequate credit spread. The interest rates used as of December 31, 2012 and 2011 are summarized as
follows:
2012 2011
Carrying amount Fair value Carrying amount Fair value

Currency forward (hedge) ₩ - - 7,314 7,314
Currency option (hedge) - - 10,088 10,088
₩ - - 17,402 17,402
The Company measured the fair value of financial instruments as follows:
- The fair value of available-for-sale financial assets traded within the market is measured at the closing bid price quoted at the end
of the reporting period.
- The fair value of the derivatives is the present value of the difference between contractual forward price and future forward price
discounted during the remaining period of the contract, from present to contractual maturity.
The fair value of current receivables is close to their carrying amounts. In addition, the fair value of other financial instruments is
determined as the present value of estimated future cash flows discounted at the current market interest rate. As of December
31, 2012, there isn’t any significant business climate and economic environment changes affecting the fair value of financial assets
and liabilities.
2012 2011
Derivatives - 3.22~3.30%
Debts and Bonds 3.08% 3.41%

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