ING Direct 2009 Annual Report Download - page 172

34 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
2009 2008 2009 2008
Financial assets
Cash and balances with central banks 15,390 22,045 15,390 22,045
Amounts due from banks 43,506 48,308 43,397 48,447
Financial assets at fair value through profit and loss
– trading assets 111,444 160,378 111,444 160,378
– investments for risk of policyholders 104,597 95,366 104,597 95,366
– non-trading derivatives 11,632 16,484 11,632 16,484
– designated as at fair value through profit and loss 5,517 8,277 5,517 8,277
Investments
– available-for-sale 197,703 242,852 197,703 242,852
– held-to-maturity 14,809 15,566 14,409 15,440
Loans and advances to customers 578,488 622,641 578,946 619,791
Other assets (1) 28,764 33,931 28,764 33,931
1,111,850 1,265,848 1,111,799 1, 263,011
Financial liabilities
Subordinated loans 7,478 6,277 10,099 10,281
Debt securities in issue 118,950 93,536 119,981 96,488
Other borrowed funds 22,261 26,544 23,151 31,198
Investment contracts for risk of company 5,896 9,804 5,896 9,804
Investment contracts for risk of policyholders 5,406 11,281 5,406 11, 281
Amounts due to banks 84,968 153,368 84,235 152,265
Customer deposits and other funds on deposit 466,822 522,693 469,508 522,783
Financial liabilities at fair value through profit and loss
– trading liabilities 98,245 152,616 98,245 152,616
– non-trading derivatives 20,070 21,773 20,070 21,773
– designated as at fair value through profit and loss 11,474 14,009 11,474 14,009
Other liabilities (2) 33,946 36,533 33,946 36,533
875,516 1,048,434 882,011 1,059,031
(1) Other assets do not include (deferred) tax assets, property held for sale, pension assets and deferred charges.
(2) Other liabilities do not include (deferred) tax liabilities, pension liabilities, insurance provisions, prepayments received under property under development,
share-based payment plans, other provisions and other taxation and social security contributions.
The estimated fair values correspond to 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. Such quoted market prices are primarily obtained from exchange prices for listed
instruments. Where an exchange price is not available, market prices are obtained from independent market vendors, brokers or market
makers. Because substantial trading markets do not exist for all financial instruments various techniques have been developed to estimate
the approximate fair values of financial assets and liabilities that are not actively traded. These techniques are subjective in nature and
involve various assumptions about the relevant pricing factors, especially for inputs that are not readily available in the market (such as
credit spreads for own-originated loans and advances to customers). 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.
Additional information to the consolidated balance sheet of ING Group (continued)
2.1 Consolidated annual accounts
ING Group Annual Report 2009
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