Mercedes 2008 Annual Report Download - page 201

Consolidated Financial Statements |Notes to Consolidated Financial Statements |197
Derivative financial instruments used in hedge accounting
include:
– Derivative currency hedging contracts. The fair values of currency
forwards are determined on the basis of the discounted esti-
mated future cash flows using market interest rates appropriate
to the remaining terms of the financial instruments. Currency
options were measured using price quotations or option pricing
models.
– Derivative interest rate hedging contracts. The fair values of inter-
est rate hedging instruments (e.g. interest rate swaps, cross
currency interest rate swaps) are calculated on the basis of the
discounted estimated future cash flows using the market
interest rates appropriate to the remaining terms of the financial
instruments. Interest options were measured using price quota-
tions or option pricing models.
– Derivative commodity hedging contracts. The fair values of com-
modity hedging contracts (e.g. commodity forwards)
are determined on the basis of current reference prices in
consideration of forward premiums and discounts.
Other receivables and assets include the following:
– Short-term other receivables and assets. These financial instru-
ments are carried at cost. Because of the short maturities
of these financial instruments, it is assumed that the fair values
approximate the carrying amounts.
– Long-term other receivables and assets. These financial instru-
ments are reported at amortized cost on the balance sheet. It
is assumed that the carrying amounts principally approximate
the fair values of these financial instruments.
Financing liabilities. The fair values of bonds are calculated as
the present values of the estimated future cash flows. Market
interest rates for the appropriate terms were used for discounting.
On account of the short terms of commercial papers and loans
used in revolving credit facilities, it is assumed that the carrying
amounts of these financial instruments approximate their fair val-
ues.
Trade payables. Due to the short maturities of these financial
instruments, it is assumed that their fair values are equal to the
carrying amounts.
Other financial liabilities. Financial liabilities recognized at
fair value through profit or loss include the following:
– Derivative financial instruments not used in hedge accounting.
See the notes above under other financial assets.
– Derivative financial instruments used in hedge accounting.
See the notes above under other financial assets.
Miscellaneous other financial liabilities include the following:
– Liabilities from residual value guarantees. For current liabilities, it
is assumed that fair value approximates the carrying amount
of these financial instruments due to their short maturities. Non-
current liabilities are reported at amortized cost on the bal-
ance sheet; it is assumed that the carrying amounts approximate
the fair values of these financial instruments.
– Miscellaneous other financial liabilities. Because of the short
maturities of these financial instruments, it is assumed that the
fair values approximate the carrying amounts.
Net gains or losses
The following table shows the net gains or losses of financial
instruments included in the income statement (not including
derivative financial instruments used in hedge accounting):
2006
20072008
(62)
(29)
(2,022)
1
469
73
(326)
20
64
168
(375)
13
Financial assets and liabilities
recognized at fair value through
profit or loss1
Financial assets available for sale
Loans and receivables
Financial liabilities measured at cost
1 Financial instruments classified as held for trading and derivative financial instruments not used in
hedge accounting.
in millions of €