119
Notes to the Consolidated Financial Statements (continued)
Level 2
Level 3
-
31. Off-balance sheet commitments
-
-
-
Heineken NV.
Report of the
Report of the
Financial
Sustainability
Other
Annual Report 2016
Introduction
Executive Board
Supervisory Board
Statements
Review
Information
During the period ended 31 December 2016 there were no significant transfers between the three levels of the fair value hierarchy, except within
the available-for-sale investments. Within this category the investment in Saigon Alcohol Beer and Beverages Corporation ('SABECO', Vietnam) has
been transferred from Level 2 to Level 1 due to the fact that SABECO shares are no longer traded over-the-counter, but have become listed on the
Ho Chi Minh Stock Exchange in December 2016. The transferred amount as per 31 December 2016 is EUR 249 million. The fair value adjustment
of EUR 144 million during the year is recognised in other comprehensive income and presented within equity in the fair value reserve.
HEINEKEN determines level 2 fair values for over-the-counter securities based on broker quotes. The fair values of simple over-the-counter derivative
financial instruments are determined by using valuation techniques. These valuation techniques maximise the use of observable market data
where available.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis
spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the
valuation received from the counterparty. Fair values reflect the credit risk of the instrument and include adjustments to take into account the credit
risk of HEINEKEN and counterparty when appropriate.
Details of the determination of level 3 fair value measurements as at 31 December 2016 are set out below:
In millions of EUR 2016 2015
Available-for-sale investments based on level 3
Balance as at 1 January
84
68
Fair value adjustments recognised in other comprehensive income
(2)
16
Disposals - -
Transfers
3
Balance as at 31 December
85
84
The fair values for the level 3 available-for-sale investments are based on the financial performance of the investments and the market multiples
of comparable equity securities.
In millions of EUR
Total 2016
Lessthan
1 year
1-5 years
More than
5 years
Total 2015*
Operational lease commitments
1,460
231
552
677
1,114
Property, plant and equipment ordered
128
120
8
293
Raw materials purchase contracts
5,287
1,569
2,455
1,263
5,989
Marketing and merchandising commitments
391
177
209
5
370
Other off-balance sheet obligations
1,542
687
509
346
1,766
Off-balance sheet obligations
8,808
2,784
3,733
2,291
9,532
Undrawn committed bank facilities
2,747
2,747
2,930
Revised.