Airbus 2015 Annual Report Download - page 256

AIRBUS GROUP FINANCIAL STATEMENTS 2015 l 74 l
Notes to the IFRSConsolidatedFinancialStatements
2.7 Capital Structure and Financial Instruments
commodity forward prices as well as price and rate volatilities
obtained from recognised vendors of market data. Furthermore,
to the extent that these instruments are subject to master netting
arrangements and similar agreements and managed on the
basis of net credit exposure, their fair values reflect credit and
debit value adjustments based on the net long or net short
position that the Group has with each counterparty. Except
for certain short-term commodity contracts discussed in the
Level3 section above, derivative fair values are measured based
on Level2 input.
Financing liabilities — The fair values disclosed for financing
liabilities, other than those of issued bonds and issued
commercial papers, are determined based on Level2 input
by discounting scheduled or expected cash flows using
appropriate market interest rates. The fair values disclosed
for the issued EMTN and US dollar bonds reflect public price
quotations that qualify as Level1 input. For issued commercial
papers, the carrying amounts reflected in the annual accounts
are used as reasonable estimates of fair value because of
the relatively short period between the origination of these
instruments and their maturity.
Trade liabilities and current other financial liabilities — For
the same reason, carrying amounts are used as reasonable
fair value approximations for trade liabilities and current other
financial liabilities.
The following interest rate curves are used in the determination of the fair value in respect of the derivative financial instruments
as of 31December 2015 and 2014:
31December
(Interest rate in %)
2015 2014 2015 2014 2015 2014
€US$ £
6months (0.08) 0.13 0.94 0.50 0.85 0.73
1year 0.14 0.37 1.12 0.82 1.13 1.02
5years 0.21 0.24 1.72 1.77 1.59 1.45
10years 0.89 0.70 2.18 2.27 1.99 1.85
35.3 Potential Effect of Set-Off Rights on Recognised Financial Assets and Liabilities
The Group reports all its financial assets and financial liabilities
on a gross basis. With each derivative counterparty there are
master netting agreements in place providing for the immediate
close-out of all outstanding derivative transactions and payment
of the net termination amount in the event a party to the
agreement defaults or another defined termination event occurs.
Furthermore, securities lending transactions are accounted for
as collateralised borrowings. As a result, the securities pledged
as collateral continue to be recognised on the balance sheet and
the amount of cash received at the outset of the transaction is
separately recognised as a financial liability. The following tables
set out, on a counterparty specific basis, the potential effect of
master netting agreements and collateralised borrowings on
the Group’s financial position, separately for financial assets
and financial liabilities that were subject to such agreements
as of 31December 2015 and 31December 2014, respectively:
Derivative instruments
(In € million)
Gross
amounts
recognised
Gross
amounts
recognised
set off in
the financial
statements
Net amounts
presented in
the financial
statements
Related amounts not set
off in the statement
of financial position
Net amount
Financial
instruments Cash collateral received
31December 2015      
Financial assets 1,280 01,280 (1,280) 0 0
Financial liabilities 10,587 010,587 (1,280) 09,307
31December 2014      
Financial assets 710 0710 (621) 089
Financial liabilities 5,503 05,503 (621) 04,882
Financial Statements 2015
11 22 33 44 55
QRegistration Document 2015
Annual Report 2015 Financial Statements 2015