Siemens 2007 Annual Report Download - page 289

Notes to Consolidated Financial Statements 289
(in millions of €, except where otherwise stated and per share amounts)
Notes to Consolidated Financial Statements
Net gains (losses) of fi nancial instruments are as follows:
Net gains (losses) on available-for-sale fi nancial assets include impairment
losses, gains or losses on derecognition and the ineffective portion of fair value
hedges. For the amount of unrealized gains or losses on available-for-sale fi nan-
cial assets recognized directly in equity during the fi scal year and the amount
removed from equity and recognized in net income for the fi scal year see Other
components of equity in Note 26.
Net losses on loans and receivables contain changes in valuation allowances,
gains or losses on derecognition as well as recoveries of amounts previously
written-off.
Net gains on fi nancial liabilities measured at amortized cost are comprised of
gains or losses from derecognition and the ineffective portion of fair value
hedges.
Net gains (losses) on fi nancial assets and fi nancial liabilities held for trading
consist of changes in the fair value of derivative fi nancial instruments (including
interest income and expense), for which hedge accounting is not applied.
31 Derivative fi nancial instruments and hedging activities
As part of the Company’s risk management program, a variety of derivative fi nan-
cial instruments are used to reduce risks resulting primarily from fl uctuations in
foreign currency exchange rates and interest rates, as well as to reduce credit
risks. For additional information on the Company’s risk management strategies,
including the use of derivative fi nancial instruments to mitigate or eliminate cer-
tain of these risks, see also Note 32.
The fair values of each type of derivative fi nancial instruments are as follows:
September 30,
2007 2006
Available-for-sale fi nancial assets (66) 69
Loans and receivables (158) (86)
Financial liabilities measured at amortized cost 57 7
Financial assets and fi nancial liabilities held for trading 60 (43)
September 30, 2007 September 30, 2006
Asset Liability Asset Liability
Foreign currency exchange contracts 602 420 171 242
Interest rate swaps and combined
interest/currency swaps 175 239 298 59
Options 19 – 21 –
Embedded derivatives 107 254 106 179
Other 40 4 50 3
943 917 646 483