APC 2015 Annual Report Download - page 236

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC234
CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER31,2015
5NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
26.2– Fair value hierarchy
Financial assets and liabilities can be classifi ed at the fair value following the hierarchy levels below:
1. market value (non-adjusted) on active markets, for similar assets and liabilities, which the company can obtain on a given valuation date;
2. data other than the market rate available for level 1, which are directly or indirectly observable on the market ;
3. data on the asset or liability that are not observable on the market.
Dec.31, 2015
Carrying Amount Fair value Level 1 Level 2 Level 3
Assets
Available-for-sale fi nancial assets 128 128 36 - 92(1)
Marketable securities 1,310 1,310 1,310 - -
Derivative instruments 139 139 - 139 -
Liabilities
Bonds (6,588) (6,898) (6,898) - -
Other long-term debt (216) (216) - - (216)
Other current liabilities (5,144) (5,144) - - (5,144)
Derivative instruments (226) (226) - (226) -
(1) Unlisted available-for-sale fi nancial assets are tested once a year and impaired when necessary.
Dec.31, 2014
Carrying Amount Fair value Level 1 Level 2 Level 3
Assets
Available-for-sale fi nancial assets 333 333 57 - 276(1)
Marketable securities 714 714 714 - -
Derivative instruments 98 98 - 98 -
Liabilities
Bonds (5,405) (5,869) (5,869) - -
Other long-term debt (372) (372) - - (372)
Other current liabilities (6,033) (6,033) - - (6,033)
Derivative instruments (164) (164) - (164) -
(1) Unlisted available-for-sale fi nancial assets are tested once a year and impaired when necessary.
26.3– Derivative instruments
26.3.1 Foreign currency
Due to the fact that a signifi cant proportion of affi liates’ transactions
are denominated in currencies other than their functional currencies,
the Group is exposed to currency risks. If the Group is not able
to hedge these risks, fl uctuations in exchange rates between the
functional currencies and other currencies can have a signifi cant
impact on its results and distort year-on-year performance
comparisons. As a result, the Group uses derivative instruments to
hedge its exposure to exchange rates mainly through futures and
natural hedges. Furthermore, some long term loans and borrowings
granted to the affi liates are considered as net investment according
to IAS21.