Porsche 2012 Annual Report Download - page 181

prior to the contribution of the holding business operations of Porsche SE to Volkswagen AG,
Porsche SE had a put option and Volkswagen AG a call option for Porsche SE’s 50.1% of shares
in Porsche Holding Stuttgart GmbH remaining prior to the contribution of the holding business
operations to Volkswagen AG. For options that are not traded on an active market, IAS 39.48 et
seq. requires that a suitable valuation technique or recent transaction be used for measurement
purposes. Options were measured using generally accepted valuation techniques based on
observable market data and historical values.
Derivative financial instruments are generally recognized at fair value through profit or loss
and remeasured at fair value in subsequent periods.
As soon as the criteria of IAS 39 for hedge accounting are satisfied, the derivative financial
instruments are designated from then on either as fair value or cash flow hedges. Otherwise,
they are allocated to the category financial assets or liabilities held for trading.
A fair value hedge hedges the exposure to changes in fair value of a recognized asset, a
recognized liability or an unrecognized firm commitment. Gains or losses arising from marking
hedging instruments to market and the secured portion of the risk of the hedged transaction
are recognized in profit or loss. If the fair value hedge ends, the adjustment of the carrying
amount arising from fair value hedge accounting for financial instruments measured at amor-
tized cost as hedged transaction is released to profit or loss over the remaining term of the
hedged transaction.
In the case of portfolio-based fair value hedges, the accounting for changes in fair value cor-
responds to the accounting for fair value hedges. Gains or losses from changes in measurement
are recognized through profit or loss.
A cash flow hedge is used to hedge exposures from highly probable future cash flows.
Hedges are only included in hedge accounting to the extent that they offset changes in the value
of the cash flows of the hedged transaction. The ineffective portion is immediately recognized in
profit or loss. When included in cash flow hedge accounting, changes in value are recorded
directly in other comprehensive income, taking deferred taxes into account. When the hedged
transaction occurs, the change in value is reclassified from other comprehensive income to
profit or loss. If the forecast transaction is no longer expected to occur, the cumulative gain or
loss previously recognized in equity is reclassified to profit or loss. Gains or losses from cash
flow hedge accounting are presented under other operating income or expenses in the income
statement.
Offsetting of financial instruments
Financial assets and liabilities are presented net in the balance sheet only if the group has a
present contractual right to settle net and if it intends to settle net or by realizing the liability
together with the asset.
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