Mercedes 2009 Annual Report Download - page 236

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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 are 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
values.
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:
– 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:
– 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
statement of financial position; it is assumed that the carrying
amounts approximate the fair values of these financial instru-
ments.
– 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 consolidated statement of
income (loss) (not including derivative financial instruments
used in hedge accounting):
Net gains and losses of financial assets and liabilities recognized at
fair value through profit or loss include primarily gains and losses
attributable to changes in fair value.
Net gains and losses on financial assets available for sale include
realized income from these investments and gains or losses from
sales transactions.
Net gains and losses on loans and receivables are mainly comprised
of impairment losses and recoveries that are charged to cost
of sales, selling expenses, other financial income (expense) and
net profit (loss) from discontinued operations.
Total interest income and total interest expense
Total interest income and total interest expense of the continued
operations for financial assets or financial liabilities that are
not measured at fair value through profit or loss are structured
as follows:
Please refer to Note 1 for qualitative descriptions of accounting for
financial instruments (including derivative financial instruments).
Information on derivative financial instruments
Use of derivatives. The Group uses derivative financial instruments
such as interest rate swaps for hedging interest risks. Currency
risks are hedged mainly through currency forward transactions
and options.
Fair values of hedging instruments. The table below shows the
fair values of hedging instruments:
2007
20082009
(407)
38
(546)
(130)
64
168
(375)
13
(62)
(29)
(2,022)
1
Financial assets and liabilities
recognized at fair value through
profit or loss 1
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 €
2007
20082009
2,983
(2,943)
3,429
(2,633)
3,610
(2,990)
Total interest income
Total interest expense
in millions of €
At December 31,
2008
2009
425
441
493
1,260
Fair value hedges
Cash flow hedges
in millions of €