Notes to the Consolidated Financial Statements (continued) O Q, Introduction Report of the Executive Board Report of the Supervisory Board The following table shows the carrying amounts and fair values of financial assets and liabilities according to their fair value hierarchy. As at 31 December Fair value In millions of amount Level 1 Level 2 Level 3 Fair value through OCI investments* Non-current derivative assets Current derivative assets 501 36 35 410 36 35 91 Total 2018 572 410 71 91 Total 2017 735 396 255 84 Non-current derivative liabilities Borrowings Current derivative liabilities (33) (13,653) (70) (13,470) (33) (503) (70) - Total 2018 (13,756) (13,470) (606) - Total 2017 (13,542) (12,660) (1,613) - In 2017 these investments were classified as available-for-sale investments. During the period ended 31 December 2018 there were no significant transfers between the three levels of the fair value hierarchy. Details of the determination of level 3 fair value measurements as at 31 December 2018 are set out below: In millions of 2018 2017 Fair value through OCI investments based on level 3 Balance as at 1 January 84 85 Fair value adjustments recognised in other comprehensive income 3 2 Disposals - 1 Transfer to associate 4 (4) Balance as at 31 December 91 84 The fair values for the level 3 fair value through OCI investments are based on the financial performance of the investments and the market multiples of comparable equity securities. Heineken N.V. Annual Report 2018! 10 Financial Statements Sustainability Review Other Information Accounting estimates The different methods applied by HEINEKEN to determine the fair value require the use of estimates. Investments in equity securities The fair value of financial assets at fair value through profit or loss and fair value through OCI is determined by reference to their quoted closing bid price at the reporting date or, if unquoted, determined using an appropriate valuation technique. These valuation techniques maximise the use of observable market data where available. Derivative financial instruments The fair value of derivative financial instruments is based on their listed market price, if available. If a listed market price is not available, fair value is in general estimated by discounting the difference between the cash flows based on contractual price and the cash flows based on current price for the residual maturity of the contact using 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 include the instrument's credit risk and adjustments to take account of the credit risk of the HEINEKEN entity and counterparty when appropriate. Non-derivative financial instruments Fair value, which is determined for disclosure purposes or when fair value hedge accounting is applied, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. Fair values include the instrument's credit risk and adjustments to take account of the credit risk of the HEINEKEN entity and counterparty when appropriate.

Jaarverslagen en Personeelsbladen Heineken

Jaarverslagen | 2018 | | pagina 109