116
Notes to the Consolidated Financial Statements (continued)
30. Financial risk management and financial instruments (continued)
Fair value hierarchy
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Level 2
Report of the
Report of the
Financial
Sustainability
Other
Introduction
Executive Board
Supervisory Board
Statements
Review
Information
Heineken N.V. Annual Report 2017
The tables below present the financial instruments accounted for at fair value and amortised cost by level of the following fair value
measurement hierarchy:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (level 2)
- Inputs forthe asset or liability that are not based on observable market data (unobservable inputs) (level 3)
31 December 2017
Level 1
Level 2
Level 3
Available-for-sale investments
396
84
Non-current derivative assets
36
Current derivative assets
219
396
255
84
Non-current derivative liabilities
(57)
Loans and borrowings
(12,660)
(1,535)
Current derivative liabilities
(21)
(12,660)
(1,613)
31 December 2016
Level 1
Level 2
Level 3
Available-for-sale investments
342
85
Non-current derivative assets
254
Current derivative assets
48
342
302
85
Non-current derivative liabilities
(10)
Loans and borrowings
(11,292)
(1,662)
Current derivative liabilities
(75)
(11,292)
(1,747)
During the period ended 31 December 201 7 there were no significant transfers between the three levels of the fair value hierarchy.
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.
