Kia 2014 Annual Report Download - page 61

December 31, 2014 and 2013
Notes to the Consolidated
Financial Statements
KIA MOTORS CORPORATION AND SUBSIDIARIES
(iii) Financial instruments not measured at fair value, but presented as fair value
Financial instruments recognized by amortized cost, but presented as fair value classied by fair value hierarchy as of December 31, 2014 are
summarized as follows:
Level 1 Level 2 Level 3 Total
Bonds and borrowings ₩ - - 4,681,337 4,681,337
The Company has not disclosed the fair values for nancial instruments, because their carrying amounts are a reasonable approximation of fair
values.
The valuation techniques and the signicant unobservable inputs used in measuring Level 3 fair values as of December 31, 2014 are summarized
as follows:
Fair value Valuation
methods
Inputs Signicant
unobservable
input
Bonds and borrowings ₩ 4,681,337 DCF model Discount rate Discount rate
(f) Income and expense by nancial instruments category for the years ended December 31, 2014 and 2013 are summarized as follows:
2014 2013
Finance
income
Finance
costs
Other
comprehensive
income
Finance
income
Finance
costs
Other
comprehensive
income
Loans and receivables ₩ 231,121 52,843 - 206,961 25,078 -
Financial asset at fair value through prot or loss 56 - - - - -
Available-for- sale nancial assets 15,831 557 45,954 223,371 15,356 (143,399)
Held-to-maturity investments - - - 901 196 -
Liabilities recognized by amortized cost 2,358 113,788 - 24,042 98,812 -
Derivative nancial instruments 1,448 2,157 - - - -
₩ 250,814 169,345 45,954 455,275 139,442 (143,399)
(KRW in millions)
(KRW in millions)
(KRW in millions)
The Company measured the fair value of nancial instruments as follows:
- The fair value of available-for-sale nancial 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.
Except for the nancial assets and liabilities above, the fair value of current receivables is close to their carrying amounts. In addition, the fair
value of other nancial instruments is determined as the present value of estimated future cash ows discounted at the current market interest
rate. As of December 31, 2014, there isn’t any signicant business climate and economic environment changes affecting the fair value of
nancial assets and liabilities.
(ii) Fair value hierarchy
Fair value measurement classied by fair value hierarchy as of December 31, 2014 are summarized as follows:
Level 1 Level 2 Level 3 Total
Financial asset at fair value through prot or loss:
Financial asset at fair value through prot or loss ₩ - 200,056 - 200,056
Available-for-sale nancial assets:
Marketable securities 917,322 832,017 - 917,322
Financial derivatives assets:
Currency swap (risk hedge) - 1,448 - 1,448
Financial derivatives assets:
Currency swap (risk hedge) - 2,157 -2,157
(*)There were no signicant transfers between levels 1, 2, and 3.
The valuation techniques and the unobservable inputs used in measuring Level 2 fair values as of December 31, 2014 are summarized as follows:
Fair value Valuation methods Inputs
Financial assets at fair value through prot or loss ₩ 200,056
DCF model Discount rate(*)
Hedging derivative nancial assets 1,448
Hedging derivative nancial liabilities 2,157
(*)The expected net cash ows are discounted using a risk-adjusted discount rate based on government bonds
(KRW in millions)
(KRW in millions)
118 119
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