Porsche 2012 Annual Report Download - page 179

Amortized cost corresponds to the original cost less redemption, impairment losses and the
release of any difference between costs and the amount repayable upon maturity calculated by
applying the effective interest method. Financial instruments are recognized as soon as the
Porsche SE group becomes a party to the contractual provisions of the financial instrument.
Financial assets are generally derecognized when the contractual right to the cash flows expires
or this right is transferred to a third party. Financial liabilities are derecognized when the obliga-
tion underlying the liability has been canceled or extinguished.
Non-derivative financial instruments
Financial instruments accounted for at fair value include financial instruments held for trading and
financial assets classified as at fair value through profit or loss upon initial recognition. Gains and
losses from subsequent measurement are recognized in profit or loss. In the Porsche SE group,
financial instruments in the category held for trading can include derivative financial instruments.
No financial assets or liabilities were classified as at fair value through profit or loss upon initial
recognition in the 2012 reporting period or in the comparative period.
Any financial instruments held to maturity are accounted for at amortized cost. Gains and
losses from subsequent measurement are recognized in profit or loss. The Porsche SE group did
not hold any financial instruments in this category as of the reporting date.
Any available-for-sale financial instruments are measured at fair value. Non-derivative finan-
cial assets that are classified as available for sale and that cannot be allocated to any other
category are included in this category. Unrealized gains and losses from subsequent measure-
ment are recognized in equity taking into account deferred taxes until the financial instruments
are derecognized or there is objective evidence of impairment. Investments presented as non-
current financial assets that are not accounted for at equity also constitute available-for-sale
financial instruments and are generally measured at fair value. If no active market exists and fair
value cannot be reliably estimated, they are measured at cost.
Loans and receivables, held-to-maturity financial instruments and financial liabilities are
measured at amortized cost unless they are related to hedging instruments. In particular, these
include other financial receivables, financial guarantees, trade payables, financial liabilities and
other financial liabilities.
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