Porsche 2009 Annual Report Download - page 239

239
The fair value of financial instruments accounted for at amortized cost, such as receivables
and liabilities, is determined by means of discounting using a market interest rate that reflects the
risks involved and term to maturity. For materiality reasons, the fair value of current balance sheet
items is assumed to match the amount recognized in the balance sheet.
As of the reporting date of the comparative period, the fair value of receivables from finan-
cial services attributable to discontinued operations was determined using the current market inter-
est rates as of the reporting date instead of the internal interest rate.
The fair value of the financial derivatives is presented in the balance sheet under other re-
ceivables and assets or other liabilities. The put and call options relating to the remaining shares in
Porsche Zwischenholding GmbH are presented as other derivatives in this balance sheet item.
In the prior year, receivables from financial services under discontinued operations con-
tained assets of €18,832 million which were valued in accordance with IAS 17.
Financial assets and liabilities measured at fair value can be broken down as follows according to
the measurement hierarchy:
The allocation of fair value is based on the availability of observable market data on an ac-
tive market. Level 1 shows the fair values of financial instruments, such as securities, where a
quoted price is directly available on active markets for identical financial instruments. The fair value
of financial instruments in level 2, such as derivatives, is derived from market data such as ex-
change rates or interest rate curves using market valuation techniques. The fair value of financial
instruments in level 3 is calculated using valuation techniques with inputs that are not based on
observable market data. These include options for equity instruments of non-listed companies. The
put and call options relating to the remaining shares in Porsche Zwischenholding GmbH were there-
fore allocated to level 3. The cash-settled options relating to shares in Volkswagen AG were meas-
ured at the beginning of the fiscal year based on the most recent transaction at arm’s length be-
tween knowledgeable, willing parties. The cash-settled stock options were allocated to level 2 for
this period. Subsequent measurement was based on a generally accepted valuation technique. The
inputs for the valuation technique are determined not only with reference to the market, but also on
the basis of historical data. Since the start of application of the generally accepted valuation tech-
€ million 31/7/2010 Level 1 Level 2 Level 3
Financial assets at fair value through profit or loss
Other financial assets 0 0 0 0
Derivative financial instruments 311 0 2 309
Securities measured at fair value 0 0 0 0
Financial assets accounted for at fair value 311 0 2 309
Financial liabilities at fair value through profit or loss
Derivative financial instruments 417 0 0 417
Financial liabilities accounted for at fair value 417 0 0 417