Siemens 2009 Annual Report Download - page 278


 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
 Consolidated Statements of Income  Consolidated Statements of Income
and Expense Recognized in Equity
 Consolidated Balance Sheets  Consolidated Statements of Cash Flow
The amounts presented include foreign currency gains and
losses from the realization and valuation of the financial as-
sets and liabilities mentioned above. These amounts are in-
cluded for the first time; prior year figures have been adjusted
accordingly.
Collateral
Siemens receives securities as collateral on certain deposits it
places with third parties. Siemens is permitted to sell or re-
pledge these securities. As of September 30, 2009 and 2008
the fair value of the collateral held amounted to €716 million
and €251 million, respectively. As of September 30, 2009, the
right to sell or re-pledge the collateral has not been exercised.
As of September 30, 2009 the carrying amount of financial as-
sets Siemens has pledged as collateral amounted to €408.
 DERIVATIVE FINANCIAL INSTRUMENTS
AND HEDGING ACTIVITIES
As part of the Company ’s risk management program, a variety
of derivative financial instruments are used to reduce risks re-
sulting primarily from fluctuations in foreign currency ex-
change rates and interest rates, as well as to reduce credit
risks. For additional information on the Company ’s risk man-
agement strategies, including the use of derivative financial
instruments to mitigate or eliminate certain of these risks, see
also Note 33.
The fair values of each type of derivative financial instruments
are as follows:
The levels of the fair value hierarchy and its application to our
financial assets and liabilities are described below:
Level 1: quoted prices in active markets for identical assets or
liabilities;
Level 2: inputs other than quoted prices that are observable for
the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on
observable market data.
Net gains (losses) of financial instruments are as follows:
Net (losses) on available-for-sale financial assets include im-
pairment losses, gains or losses on derecognition and the inef-
fective portion of fair value hedges. For the amount of unreal-
ized gains or losses on available-for-sale financial assets recog-
nized directly in equity during the fiscal year and the amount
removed from equity and recognized in net income for the fis-
cal year see Other components of equity in Note 27.
Net (losses) on loans and receivables contain changes in valu-
ation allowances, gains or losses on derecognition as well as
recoveries of amounts previously written-off.
Net gains on financial liabilities measured at amortized cost
are comprised of gains or losses from derecognition and the
ineffective portion of fair value hedges.
Net gains on financial assets and financial liabilities held for
trading consist of changes in the fair value of derivative finan-
cial instruments (including interest income and expense), for
which hedge accounting is not applied.
B27T085_E
September 30,
2009 2008
Cash and cash equivalents 7(95)
Available-for-sale financial assets (44) (1)
Loans and receivables (419) (218)
Financial liabilities measured at amortized cost 302 238
Financial assets and financial liabilities
held for trading 34 63
B27T086_E
September 30, 2009 September 30, 2008
Asset Liability Asset Liability
Foreign currency
exchange contracts 735 462 371 979
Interest rate swaps and
combined interest/currency
swaps 1,764 204 424 168
Embedded derivatives 156 133 128 144
Options 164 172 65 56
Other 52 27 9 58
2,871 998 997 1,405