Siemens 2013 Annual Report Download - page 314

92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report

Cash and cash equivalents includes € million and €
million as of September ,  and , respectively, which
are not available for use by Siemens mainly due to minimum
reserve requirements with banks.
As of September ,  and , the carrying amount of
financial assets Siemens has pledged as collateral amounted
to € million and € million, respectively.
The fair values of cash and cash equivalents, trade and other
receivables and trade payables with a remaining term of up to
twelve months, other current financial liabilities and borrow-
ings under revolving credit facilities approximate their carry-
ing amount, mainly due to the short-term maturities of these
instruments.
Fixed-rate and variable-rate receivables with a remaining term
of more than twelve months, including receivables from
finance leases, are evaluated by the Company based on pa-
rameters such as interest rates, specific country risk factors,
individual creditworthiness of the customer, and the risk char-
acteristics of the financed project. Based on this evaluation,
allowances for these receivables are recognized. As of Sep-
tember ,  and , the carrying amounts of such
receivables, net of allowances, approximate their fair values.
The fair value of quoted notes and bonds is based on price
quotations at the period-end date. The fair value of unquoted
notes and bonds, loans from banks and other financial indebt-
edness, obligations under finance leases as well as other
non-current financial liabilities is estimated by discounting
future cash flows using rates currently available for debt of
similar terms and remaining maturities.
Financial instruments categorized as financial assets and
financial liabilities measured at fair value are presented in the
following table:
September 30,
(in millions of €) 2013 2012
Financial assets measured at fair value
Available-for-sale financial assets 1,994 1,252
Derivative financial instruments 2,330 3,328
Not designated in a hedge
accounting relationship 1,587 1,202
In connection with fair value hedges 472 1,783
Foreign currency exchange derivatives 622
Interest rate derivatives 466 1,761
In connection with cash flow hedges 153 135
Foreign currency exchange derivatives 152 132
Commodity derivatives 13
Embedded derivatives 118 208
4,324 4,580
Financial liabilities measured at fair value
Derivative financial instruments 1,047 1,125
Not designated in a hedge
accounting relationship 765 823
In connection with fair value hedges 811
Foreign currency exchange derivatives 32
Interest rate derivatives 59
In connection with cash flow hedges 152 193
Foreign currency exchange derivatives 148 185
Interest rate derivatives –8
Commodity derivatives 3–
Embedded derivatives 122 98
1,047 1,125
The fair value of available-for-sale financial assets quoted in an
active market is based on price quotations at the period-end
date. The fair value of unquoted debt instruments is estimated
by discounting future cash flows using current market interest
rates.
The Company limits default risks resulting from derivative
financial instruments by a careful counterparty selection.
Derivative financial instruments are generally transacted with
financial institutions with investment grade credit ratings. The
fair valuation of derivative financial instruments at Siemens
incorporates all factors that market participants would con-
sider, including the counterparties’ credit risks. The exact
calculation of fair values of derivative financial instruments
depends on the specific type of instrument: