BMW 2014 Annual Report Download - page 154

154
90 GROUP FINANCIAL STATEMENTS
90 Income Statements
90 Statement of
Comprehensive Income
92 Balance Sheets
94 Cash Flow Statements
96 Group Statement of Changes in
Equity
98 Notes
98 Accounting Principles and
Policies
116 Notes to the Income Statement
123 Notes to the Statement
of Comprehensive Income
124
Notes to the Balance Sheet
149 Other Disclosures
165 Segment Information
Fair value measurement of financial instruments
The fair values shown are computed using market in-
formation
available at the balance sheet date, on the
basis of prices quoted by the contract partners or using
appropriate measurement methods, e. g. discounted cash
flow models. In the latter case, amounts were discounted
at 31 December 2014 on the basis of the following inter-
est rates:
Interest rates taken from interest rate curves were ad-
justed, where necessary, to take account of the credit
quality and risk of the underlying financial instrument.
Derivative financial instruments are measured at their
fair value. The fair values of derivative financial instru-
ments are determined using measurement models, as a
consequence of which there is a risk that the amounts
calculated could differ from realisable market prices on
disposal. Observable financial market price spreads are
taken into account in the measurement of derivative
financial instruments. The supply of data to the model
used to calculate fair values also takes account of tenor
and currency basis spreads, thus helping to minimise
differences between the carrying amounts of the
instru-
ments and the amounts that can be realised on the finan-
cial markets on their disposal. In addition, the Group’s
own default risk and that of counterparties is taken into
account in the form of credit default swap (CDS) con-
tracts which have matching terms and which can be ob-
served on the market.
Financial instruments measured at fair value are allo-
cated to different measurement levels in accordance
with IFRS 13. This includes financial instruments that
are
1. measured at their fair values in an active market for
identical financial instruments (Level 1),
2. measured at their fair values in an active market for
comparable financial instruments or using measure-
ment models whose main input factors are based on
observable market data (Level 2), or
3. using input factors not based on observable market
data (Level 3).
The following table shows the amounts allocated to
each measurement level at the end of the reporting
period:
31 December 2014
Level hierarchy in accordance with IFRS 13
in € million Level 1 Level 2 Level 3
Marketable securities, investment fund shares and collateral assets – available-for-sale 3,772 – –
Other investments – available-for-sale 231 – –
Derivative instruments (assets)
Cash flow hedges – 708 –
Fair value hedges – 1,294 –
Other derivative instruments – 886 –
Derivative instruments (liabilities)
Cash flow hedges – 1,302 –
Fair value hedges – 721 –
Other derivative instruments – 1,120 –
ISO Code EUR USD GBP JPY CNY
in %
Interest rate for six months 0.13 0.31 0.68 0.07 4.91
Interest rate for one year 0.16 0.43 0.74 0.14 4.44
Interest rate for five years 0.36 1.78 1.45 0.22 4.16
Interest rate for ten years 0.82 2.31 1.87 0.52 4.22