Porsche 2011 Annual Report Download - page 163

Fair value corresponds to the market price provided the financial instruments measured are traded on
an active market. If there is no active market for a financial instrument, fair value is calculated using appropriate
valuation techniques such as generally accepted option price models or discounting future cash flows with the
market interest rate, or by referring to the most recent business transactions between knowledgeable, willing
and independent business partners for one and the same financial instrument, if necessary confirmed by the
banks processing the transactions.
Amortized cost corresponds to the original cost less redemption, impairment losses and the release of
any difference between costs and the amount repayable upon maturity calculated by applying the effective
interest method. Financial instruments are recognized as soon as the Porsche SE group becomes a party to
the contractual provisions of the financial instrument. Financial assets are generally derecognized when the
contractual right to the cash flows expires or this right is transferred to a third party. Financial liabilities are
derecognized when the obligation underlying the liability has been canceled or extinguished.
Non-derivative financial instruments
Financial instruments accounted for at fair value include financial instruments held for trading and
financial assets classified as at fair value through profit or loss upon initial recognition. Gains and losses from
subsequent measurement are recognized in profit or loss. In the Porsche SE group, financial instruments in the
category held for trading include derivative financial instruments only. No financial assets or liabilities were
classified as at fair value through profit or loss upon initial recognition in the 2011 reporting period or in the
comparative period.
Any financial instruments held to maturity are accounted for at amortized cost. Gains and losses from
subsequent measurement are recognized in profit or loss. The Porsche SE group did not hold any financial
instruments in this category as of the reporting date.
Any available-for-sale financial instruments are measured at fair value. Non-derivative financial assets
that are classified as available for sale and that cannot be allocated to any other category are included in this
category. Unrealized gains and losses from subsequent measurement are recognized in equity taking into
account deferred taxes until the financial instruments are derecognized or there is objective evidence of
impairment. Investments presented as non-current financial assets that are not accounted for at equity also
constitute available-for-sale financial instruments and are generally measured at fair value. If no active market
exists and fair value cannot be reliably estimated, they are measured at cost.
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