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ABOUT UNILEVER GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
123Unilever Annual Report and Accounts 2012 Financial statements
18 Fnancal nstruments far value rsk
18 Fnancal nstruments far value rsk
The roup is exposed to the risks of changes in fair value of its financial assets and liabilities. The following table summarises the fair
values and carrying amounts of financial instruments.
Far values of fnancal assets and fnancal labltes
 mllon
Far
value
2012
€ million
Fair
value
2011
 mllon
arryng
amount
2012
€ million
Carrying
amount
2011
Fnancal assets
Cash and cash equivalents 2,465 3,484 2,465 3,484
Held-to-maturity investments 29 –29 –
Loans and receivables 3932 3932
Available-for-sale financial assets 687 720 687 720
Financial assets at fair value through profit or loss:
Derivatives 170 208 170 208
Other 47 71 47 71
3,401 5,415 3,401 5,415
Fnancal labltes
Preference shares (112) (102) (68) (68)
Bank loans and overdrafts (1,347) (2,737) (1,346) (2,737)
Bonds and other loans (9,458) (11,605) (8,479) (10,585)
Finance lease creditors (233) (231) (202) (204)
Derivatives (126) (124) (126) (124)
(11,276) (14,799) (10,221) (13,718)
The fair value of trade receivables and payables is considered to be equal to the carrying amount of these items due to their
short-term nature.
Far value herarchy
The fair values shown above have been classified into three categories depending on the inputs used in the valuation technique.
The categories used are as follows:
• Level 1: quoted prices for identical instruments;
• Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and
• Level 3: inputs which are not based on observable market data.
For assets and liabilities which are carried at fair value, the classification of fair value calculations by category is summarised below:
 mllon
Level 1
2012
€ million
Level 1
2011
 mllon
Level 2
2012
€ million
Level 2
2011
 mllon
Level 3
2012
€ million
Level 3
2011
 mllon
Total far
value
2012
€ million
Total fair
value
2011
Assets at far value
Other cash equivalents 17A ––139 102 ––139 102
Available-for-sale financial assets 17A 16 236 185 482 486 2687 720
Financial assets at fair value
through profit or loss:
Derivatives 16C ––193 266 ––193 266
Other 17A 27 71 ––20 –47 71
Labltes at far value
Bonds and other loans 15C ––(1,556) (2,330) ––(1,556) (2,330)
Derivatives 16C ––(328) (197) ––(328) (197)
During the reporting period ending 31 December 2012, €275 million of financial assets were transferred from Level 1 to Level 3
(2011: €nil) and €197 million of financial assets were transferred from Level 2 to Level 3 (2011: €nil) following a review of the valuation
inputs. There were no transfers from Level 2 to Level 1 (2011: €nil).
Reconciliation of Level 3 fair value measurements of financial assets is given below:
Reconclaton of movements n Level 3 valuatons
 mllon
2012
€ million
2011
1 January 269
Gains and losses recognised in profit and loss (35) –
Gains and losses recognised in other comprehensive income 67 (20)
Purchases and new issues ––
Sales and settlements –(47)
Transfers into Level 3 472 –
Transfers out of Level 3 ––
31 December 506 2