Mercedes 2012 Annual Report Download - page 236

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7 | Consolidated Financial Statements | Notes to the Consolidated Financial Statements
Receivables from financial services. The fair values of
receivables from financial services with variable interest rates
are estimated to be equal to the respective carrying amounts
because the interest rates agreed and those available on the
market do not significantly differ. The fair values of receivables
from financial services with fixed interest rates are deter-
mined on the basis of discounted expected future cash flows.
The discounting is based on the current interest rates at which
similar loans with identical terms could have been borrowed
as of December 31, 2012 and December 31, 2011.
Trade receivables and cash and cash equivalents. Due
to the short terms of these financial instruments, it is assumed
that their fair values are equal to the carrying amounts.
Marketable debt securities and other financial assets.
Financial assets available for sale include:
– debt and equity instruments measured at fair value; these
instruments were measured using quoted market prices
at December 31. Otherwise, the fair value measurement of
these debt and equity instruments is based on inputs that
are either directly or indirectly observable on active markets.
Equity instruments measured at fair value predominantly
comprise the investments in Renault and Nissan.
– equity interests measured at cost; for these financial instru-
ments fair values could not be determined because market
prices or fair values are not available. These equity interests
comprise investments in non-listed companies for which
no objective evidence existed at the balance sheet date that
these assets are impaired and whose fair values cannot
be determined with sufficient reliability. It is assumed that
the fair values approximate the carrying amounts.
Financial assets recognized at fair value through profit or loss
include derivative financial instruments not used in hedge
accounting. These financial instruments as well as derivative
financial instruments used in hedge accounting comprise:
– derivative currency hedging contracts; the fair values
of currency forwards and cross currency interest rate swaps
are determined on the basis of the discounted estimated
future cash flows using market interest rates appropriate
to the remaining terms of the financial instruments. Currency
options were measured using price quotations or option
pricing models using market data.
– derivative interest rate hedging contracts; the fair values
of interest rate hedging instruments (e.g. interest rate
swaps) are calculated on the basis of the discounted estimated
future cash flows using the market interest rates appropriate
to the remaining terms of the financial instruments.
– derivative commodity hedging contracts; the fair values
of commodity hedging contracts (e.g. commodity forwards)
are determined on the basis of current reference prices
in consideration of forward premiums and discounts.
Financial assets recognized at fair value through profit and
loss also include the option held by Daimler to sell shares
in Engine Holding to Rolls-Royce (see also Note 13). The fair value
of this option has been determined with the use of an option
pricing model; estimated future cash flows and, to the extent
available, market parameters were applied.
Other receivables and assets are carried at amortized cost.
Because of the predominantly short maturities of these financial
instruments, it is assumed that the fair values approximate
the carrying amounts.
Financing liabilities. The fair values of bonds, loans, commer-
cial papers, deposits in the direct banking business and liabil-
ities from ABS transactions are calculated as the present values
of the estimated future cash flows. Market interest rates for
the appropriate terms are used for discounting.
Trade payables. Due to the short maturities of these financial
instruments, it is assumed that their fair values are equal to
the carrying amounts.
Other financial liabilities. Financial liabilities recognized
at fair value through profit or loss comprise derivative financial
instruments not used in hedge accounting. For information
regarding these financial instruments as well as derivative
financial instruments used in hedge accounting see the notes
above under “Marketable debt securities and other financial
assets.”
Miscellaneous other financial liabilities are carried at amortized
cost. Because of the predominantly short maturities of these
financial instruments, it is assumed that the fair values approx-
imate the carrying amounts.