Notes to the Consolidated Financial Statements (continued)
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
In millions of
Fair value through OCI investments*
Non-current derivative assets
Current derivative assets
Non-current derivative liabilities
Current derivative liabilities
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
In millions of
Fair value through OCI investments based on level 3
Balance as at 1 January
Fair value adjustments recognised in other comprehensive income
Transfer to associate
Balance as at 31 December
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
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
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.