Nokia 2014 Annual Report Download - page 193

191NOKIA IN 2014
Financial statements
Accounts payable
Accounts payable are carried at invoiced amount which is considered to be the fair value due to the short-term nature of the Parent Company’s
accounts payable.
Derivative nancial instruments
Interest income or expense on interest rate derivatives is accrued in the income statement during the nancial year. In the nancial statements,
outstanding interest rate forward contracts, interest rate future contracts, interest rate option contracts and interest rate swap contracts are
stated at market values and included in the income statement.
Forward foreign exchange contracts are valued using the forward exchange rate of the statement of nancial position date. The exchange
dierences arising from outstanding derivative contracts are reported in nancial items. Foreign exchange option contracts are valued using
an option valuation model on the statement of nancial position date and reported in nancial items.
Fair values of forward rate agreements, interest rate options, futures contracts and exchange traded options are calculated based on quoted
market rates at each statement of nancial position date. Discounted cash ow analyses are used to value interest rate and cross-currency
interest rate swaps.
Deferred tax
Deferred tax assets and liabilities are calculated for temporary dierences between tax bases and book values using the tax rate for future years
as enacted at the statement of nancial position date. Deferred tax liabilities are recognized in full. Deferred tax assets are recognized at the
probable amount estimated to be received.
Foreign currency translation
Receivables and payables denominated in foreign currencies are converted into euro using the exchange rate prevailing on the statement
of nancial position date.