LensCrafters 2015 Annual Report Download - page 192

Notes to the separate financial statements as of December 31, 2015 Page 12 of 77
• Level 3: unobservable inputs, which are used when observable inputs are not available in situations where there is
little, if any market activity for the asset or liability.
When selecting valuation techniques, the Group adopts the following order of priority:
• use of prices quoted on markets (even if not active) for identical instruments (Recent Transactions) or similar
instruments (Comparable Approach);
• use of valuation techniques based predominantly on observable market data;
• use of valuation techniques based predominantly on unobservable market data.
The Company has determined the value of outstanding derivatives at December 31, 2015 using commonly adopted
valuation techniques for the type of derivatives entered into by the Group. The models used for valuing these
instruments rely on inputs obtained from the info provider Bloomberg, which mostly consist of observable market data
(Euro and USD yield curves and official exchange rates at the valuation date).
The following table reports the Company's at-fair-value financial assets and financial liabilities according to this
hierarchy:
(in thousands Fair Value at the reporting date
using:
of Euro)
Description Classification 12/31/2015 Level 1 Level 2 Level 3
Forex derivatives Other current assets 1,396 1,396
Commodity swaps Other current liabilities 218 218
Forex derivatives Other current liabilities 1,836 1,836
(in thousands Fair Value at the reporting
date using:
of Euro)
Description Classification 12/31/2014 Level 1 Level 2 Level 3
Forex forwards Other current assets 703 703
Interest rate derivatives Other current liabilities 597 597
Forex forwards Other current liabilities 4,524 4,524
As of December 31, 2015, none of the Company's financial instruments was valued using Level 3 fair value
measurements.
The Company maintains policies and procedures that aim to measure the fair value of assets and liabilities using the
best and most relevant data available.
The Company's portfolio of foreign exchange derivatives includes only forex forward contracts maturing in under one
year for the most traded currency pairs. The fair value of the portfolio is calculated using internal models that use
market observable inputs including yield curves, and foreign exchange spot and forward prices.