ING Direct 2008 Annual Report Download - page 160

2.1 Consolidated annual accounts
Additional information to the consolidated balance sheet of ING Group (continued)
33 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The following table presents the estimated fair values of ING Group’s financial assets and liabilities. Certain balance sheet items are not
included in the table, as they do not meet the definition of a financial asset or liability. The aggregation of the fair values presented below
does not represent, and should not be construed as representing, the underlying value of ING Group.
Fair value of financial assets and liabilities
Estimated fair value Balance sheet value
2008 2007 2008 2007
Financial assets
Cash and balances with central banks 22,045 12,406 22,045 12,406
Amounts due from banks 48,308 48,461 48,447 48,875
Financial assets at fair value through profit and loss
– trading assets 160,378 193,213 160,378 193,213
– investments for risk of policyholders 95,366 114 ,827 95,366 114, 827
– non-trading derivatives 16,484 7,637 16,484 7,637
– designated as at fair value through profit and loss 8,277 11, 453 8,277 11,453
Investments
– available-for-sale 242,852 275,897 242,852 275,897
– held-to-maturity 15,566 16,354 15,440 16,753
Loans and advances to customers 622,641 546,358 619,791 552,964
Other assets (1) 48,794 32,559 48,794 32,559
1,280,711 1,259,165 1,277,874 1,266,584
Financial liabilities
Preference shares 21 21
Subordinated loans 6,277 6,731 10,281 7,325
Debt securities in issue 93,536 66,555 96,488 66,995
Other borrowed funds 26,544 32,595 31,198 27,0 58
Investment contracts for risk of company 9,804 9,520 9,804 9,520
Investment contracts for risk of policyholders 11,281 14,132 11,281 14,132
Amounts due to banks 153,368 167, 365 152,265 166,972
Customer deposits and other funds on deposit 522,693 522,859 522,783 525,216
Financial liabilities at fair value through profit and loss
– trading liabilities 152,616 148,988 152,616 148,988
– non-trading derivatives 21,773 6,951 21,773 6,951
– designated as at fair value through profit and loss 14,009 13,882 14,009 13,882
Other liabilities (2) 51,978 35,724 51,978 35,724
1,063,879 1,025,323 1,074,476 1,022,784
(1) Other assets do not include (deferred) tax assets, property held for sale, property under development for third parties, pension assets and deferred charges.
(2) Other liabilities do not include (deferred) tax liabilities, pension liabilities, insurance provisions, property under development for third parties, share-based
payment plans, other provisions and other taxation and social security contributions.
The estimated fair values correspond with the amounts at which the financial instruments at our best estimate could have been traded at
the balance sheet date between knowledgeable, willing parties in arm’s length transactions. The fair value of financial assets and liabilities
is based on quoted market prices, where available. Because substantial trading markets do not exist for all of these financial instruments
various techniques have been developed to estimate their approximate fair values. These techniques are subjective in nature and involve
various assumptions about the relevant pricing factors. Changes in these assumptions could significantly affect the estimated fair values.
Consequently, the fair values presented may not be indicative of the net realisable value. In addition, the calculation of the estimated fair
value is based on market conditions at a specific point in time and may not be indicative of future fair values.
The following methods and assumptions were used by ING Group to estimate the fair value of the financial instruments:
Financial assets
Cash and balances with central banks
The carrying amount of cash approximates its fair value.
Amounts due from banks
The fair values of receivables from banks are generally based on quoted market prices or, if unquoted, on estimates based on discounting
future cash flows using available market interest rates offered for receivables with similar characteristics.
ING Group Annual Report 2008
158