Reebok 2011 Annual Report Download - page 210

adidas Group
2011 Annual Report
CONSOLIDATED FINANCIAL STATEMENTS
206
2011
206
2011
04.8
04.8 Notes Notes to the Consolidated Statement of Financial Position
Due to the short-term maturities of cash and cash equivalents, short-
term financial assets, accounts receivable and payable as well as
other current financial receivables and payables, their respective fair
values approximate their carrying amount.
The fair values of non-current financial assets and liabilities are
estimated by discounting expected future cash flows using current
interest rates for debt of similar terms and remaining maturities, and
adjusted by an adidas Group specific credit risk premium.
Fair values of long-term financial assets classified as available-
for-sale are based on quoted market prices in an active market or are
calculated as present values of expected future cash flows.
The fair values of forward contracts and currency options are
determined on the basis of market conditions at the balance sheet
date. The fair value of a currency option is determined using generally
accepted models to calculate option prices, such as the “Garman-
Kohlhagen-model”. The fair market value of an option is influenced
not only by the remaining term of the option, but also by other deter-
mining factors such as the actual foreign exchange rate and the
volatility of the underlying foreign currency base.
Net gains/(losses) on financial instruments recognised in the
consolidated income statement (€ in millions)
Year ending
Dec. 31, 2011
Year ending
Dec. 31, 2010
Financial assets or financial liabilities at fair value
through profit or loss (12) (6)
Thereof: designated as such upon initial
recognition – –
Thereof: classified as held for trading (12) (6)
Loans and receivables (44) (19)
Available-for-sale financial assets – –
Financial liabilities measured at amortised cost 15 6
Net gains or losses on financial assets or financial liabilities held for
trading include the effects from fair value measurements of the deriv-
atives that are not part of a hedging relationship, and changes in the
fair value of other financial instruments as well as interest payments
which mainly relate to investment funds.
Fair value hierarchy of financial instruments according to IFRS 7 as at December 31, 2011
(€ in millions)
Fair value hierarchy, aggregated by category Fair value
Dec. 31, 2011
Level 1 Level 2 Level 3
Financial assets at fair value through profit or loss
Thereof: designated as such upon initial recognition (Fair Value Option – FVO) −
Thereof: Held for Trading (Financial Assets Held for Trading – FAHfT) 566 487 79 1)
Available-for-Sale Financial Assets (AfS) 18 18
Other financial assets
Derivatives being part of a hedge 159 159
Financial assets 743 664 79
Financial Liabilities at fair value through profit or loss Held for Trading (FLHfT) 12 12
Other financial liabilities
Derivatives being part of a hedge 22 22
Financial liabilities 34 34
Fair value
Jan. 1, 2011
Gains Losses Fair value
Dec. 31, 2011
1) This category relates to a 9.1% investment in FC Bayern München AG of € 79 million.
Dividends are distributed by FC Bayern München AG instead of regular interest payments.
79 0 – 79
Level 1 is based on quoted prices in active markets for identical assets or liabilities.
Level 2 is based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 is based on inputs for the asset or liability that are not based on observable market data (unobservable inputs).