Mercedes 2009 Annual Report Download - page 235

Consolidated Financial Statements |Notes to Consolidated Financial Statements |231
The fair values of financial instruments were calculated on the
basis of market information available on the balance sheet date.
The following methods and premises were used:
Receivables from financial services. The fair values of receiv-
ables from financial services with variable interest rates are
estimated to be equal to the respective carrying amounts since
the interest rates agreed and those available on the market do
not significantly differ. The fair values of receivables from financial
services with fixed interest rates are determined on the basis of
discounted expected future cash flows. The discounting is based on
the current interest rates at which similar loans with identical
terms could have been borrowed as of December 31, 2009 and
December 31, 2008.
Trade receivables and cash and cash equivalents. Due to
the short terms of these financial instruments, it is assumed that
their fair values are equal to the carrying amounts.
Other financial assets. Financial assets available for sale
include:
– Equity interests measured at fair value. The equity interests
measured at fair value were measured using quoted market prices
at December 31.
– Equity interests measured at cost. These equity interests for which
fair values or market prices are not available are measured at
cost. These equity interests comprise investments in non-listed
companies for which no objective evidence existed at the
balance sheet date that these assets are impaired and whose
fair values can not be determined with sufficient reliability.
It is assumed that the fair values are equal to the carrying
amounts.
– Debt instruments. Debt instruments were measured using
quoted market prices at December 31. The fair values of debt
securities for which quoted prices could not be obtained on
the market were based on valuation models using market data.
Financial assets recognized at fair value through profit or loss
include:
– Derivative financial instruments not used in hedge accounting.
For further details on currency, interest rate and commodity
hedging contracts, see the comments under derivative financial
instruments used in hedge accounting. The fair values of
hedging instruments for equities are calculated using price
quotations in consideration of forward premiums and dis-
counts or through option pricing models. Hedging instruments
for equities in 2008 also include instruments for listed
investments, which are accounted for using the equity method.
– Trading securities. The trading securities measured at fair value
were measured using quoted market prices at December 31.
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 using market data.
– Derivative interest rate hedging contracts. The fair values of
interest 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 quotations or option pricing models using market data.
– Derivative commodity hedging contracts. The fair values of
commodity 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:
– 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 statement
of financial position. It is assumed that the carrying amounts
principally approximate the fair values of these financial
instruments.