Reebok 2013 Annual Report Download - page 228

adidas Group
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2013 Annual Report
Consolidated Financial Statements
224
2013
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04.8
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Notes
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Notes to the Consolidated Statement of Financial Position
Fair value hierarchy of financial instruments according to IFRS 7 as at December 31, 2013
(€ in millions) Fair value
Dec. 31, 2013
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) 137 57 80 1)
Available-for-Sale Financial Assets (AfS) 27 27
Other financial assets
Derivatives being part of a hedge 43 43
Financial assets 207 127 80
Financial Liabilities at fair value through profit or loss Held for Trading (FLHfT) 16 16
Other financial liabilities
Derivatives being part of a hedge 77 77
Financial liabilities 93 93
Fair value
Jan. 1, 2013
Gains Losses Fair value
Dec. 31, 2013
1) This category relates to a 9.1% investment in FC Bayern München AG of € 80 million. Dividends
are distributed by FC Bayern München AG instead of regular interest payments.
79 1 — 80
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).
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. The fair market value of an option is influenced not only by the remaining term of the
option, but also by other determining factors such as the actual foreign exchange rate and the volatility of the
underlying foreign currency base.
In accordance with IFRS 13, the following tables show the valuation methods used in measuring Level 1,
Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.
Financial instruments Level 1 not measured at fair value
Type Valuation method Significant unobservable
inputs
Category
Convertible bond The fair value is based on the market price of the
convertible bond as at December 31, 2013.
Not applicable FLAC
Eurobond The fair value is based on the market price of the
Eurobond as at December 31, 2013.
Not applicable FLAC