41. Carrying amounts and fair values according to measurement category

The carrying amounts and fair values of recognised financial instruments are as follows:

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30/9/2014

 

 

 

 

 

 

 

 

Balance sheet value

 

 

 

 

 

 

 

€ million

Carrying amount

(Amortised) cost

Fair value through profit or loss

Fair value outside of profit or loss

Fair value

1

Adjustment of previous year’s figures (see notes to the group accounting principles and methods)

Assets

28,156

n/a

n/a

n/a

n/a

Loans and receivables

2,901

2,901

0

0

2,900

Loans and advance credit granted

56

56

0

0

54

Receivables due from suppliers1

1,668

1,668

0

0

1,668

Trade receivables

560

560

0

0

560

Miscellaneous financial assets

617

617

0

0

618

Held to maturity

0

0

0

0

0

Miscellaneous financial assets

0

0

0

0

0

Held for trading

26

0

26

0

26

Derivative financial instruments not in a hedging relationship according to IAS 39

26

0

26

0

26

Available for sale

19

18

0

1

n/a

Investments

18

18

0

0

n/a

Securities

1

0

0

1

1

Derivative financial instruments in a hedging relationship according to IAS 39

23

0

0

23

23

Cash and cash equivalents

2,406

2,406

0

0

2,406

Receivables from finance leases (amount according to IAS 17)

0

n/a

n/a

n/a

0

Assets not classified according to IFRS 71

22,780

n/a

n/a

n/a

n/a

Equity and liabilities

28,156

n/a

n/a

n/a

n/a

Held for trading

5

0

5

0

5

Derivative financial instruments not in a hedging relationship according to IAS 39

5

0

5

0

5

Other financial liabilities

17,477

17,405

0

72

17,734

Borrowings excl. finance leases (incl. hedged items in hedging relationships according to IAS 39)

5,790

5,790

0

0

6,047

Trade receivables1

10,075

10,075

0

0

10,075

Miscellaneous financial liabilities

1,612

1,540

0

72

1,612

Derivative financial instruments in a hedging relationship according to IAS 39

5

0

0

5

5

Liabilities from finance leases (amount according to IAS 17)

1,278

n/a

n/a

n/a

1,497

Liabilities not classified according to IFRS 71

9,392

n/a

n/a

n/a

n/a

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30/9/2015

 

 

 

 

 

 

 

 

Balance sheet value

 

 

 

 

 

 

 

€ million

Carrying amount

(Amortised) cost

Fair value through profit or loss

Fair value outside of profit or loss

Fair value

Assets

27,656

n/a

n/a

n/a

n/a

Loans and receivables

3,209

3,209

0

0

3,207

Loans and advance credit granted

55

55

0

0

54

Receivables due from suppliers

1,674

1,674

0

0

1,674

Trade receivables

702

702

0

0

702

Miscellaneous financial assets

777

777

0

0

777

Held to maturity

0

0

0

0

0

Miscellaneous financial assets

0

0

0

0

0

Held for trading

30

0

30

0

30

Derivative financial instruments not in a hedging relationship according to IAS 39

30

0

30

0

30

Available for sale

486

9

0

477

n/a

Investments

69

9

0

60

n/a

Securities

417

0

0

417

417

Derivative financial instruments in a hedging relationship according to IAS 39

22

0

0

22

22

Cash and cash equivalents

4,415

4,415

0

0

4,415

Receivables from finance leases (amount according to IAS 17)

33

n/a

n/a

n/a

46

Assets not classified according to IFRS 7

19,462

n/a

n/a

n/a

n/a

Equity and liabilities

27,656

n/a

n/a

n/a

n/a

Held for trading

18

0

18

0

18

Derivative financial instruments not in a hedging relationship according to IAS 39

18

0

18

0

18

Other financial liabilities

17,341

17,164

65

112

17,462

Borrowings excl. finance leases (incl. hedged items in hedging relationships according to IAS 39)

6,154

6,154

0

0

6,275

Trade liabilities

9,550

9,550

0

0

9,550

Miscellaneous financial liabilities

1,637

1,460

65

112

1,637

Derivative financial instruments in a hedging relationship according to IAS 39

5

0

0

5

5

Liabilities from finance leases (amount according to IAS 17)

1,213

n/a

n/a

n/a

1,515

Liabilities not classified according to IFRS 7

9,080

n/a

n/a

n/a

n/a

Classes were formed based on similar risks for the respective financial instruments and correspond to the categories of IAS 39. Derivative financial instruments in a hedging relationship under IAS 39 and other financial liabilities are classified in each case to a separate class.

The fair value hierarchy comprises three levels which reflect the degree of closeness to the market of the input parameters used in the determination of the fair values. In cases in which the valuation is based on different input parameters, the fair value is attributed to the hierarchy level corresponding to the input parameter of the lowest level that is significant for the valuation.

Input parameters for level 1: quoted prices (that are adopted unchanged) in active markets for identical assets or liabilities which the company can access at the valuation date.

Input parameters for level 2: other input parameters than the quoted prices included in level 1 which are either directly or indirectly observable for the asset or liability.

Input parameters for level 3: input parameters that are not observable for the asset or liability.

Of the total carrying amount of investments of €69 million (30/9/2014: €18 million), €9 million (30/9/2014: €18 million) are recognised at historical cost as a fair value cannot be reliably determined. These concern off-exchange financial instruments without an active market. The company currently does not plan to dispose of the investments recognised at historical cost. Non-listed investments in real estate companies totalling €60 million (30/9/2014: €0 million) are recognised at fair value outside of profit or loss. The addition stems from the sale of the Galeria Kaufhof group.

In addition, securities totalling €417 million (30/9/2014: €1 million) are recognised outside of profit or loss. This primarily concerns highly liquid exchange-listed money market funds.

Miscellaneous financial liabilities include liabilities from put options of non-controlling interests in the amount of €156 million (30/9/2014: €72 million) as well as earn-out liabilities (contingent purchase payments related to corporate acquisitions) totalling €21 million (30/9/2014: €0 million). Of this amount, €112 million (30/9/2014: €72 million) are recognised at fair value outside of profit or loss and €65 million (30/9/2014: €0 million) are recognised at fair value through profit or loss.

The following table depicts the financial instruments that are recognised at fair value in the balance sheet. These are classified into a three-level fair value hierarchy whose levels reflect the degree of closeness to the market of the data used in the determination of the fair values:

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30/9/2014

30/9/2015

 

 

 

 

 

 

 

 

 

€ million

Total

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Assets

50

1

49

0

529

417

52

60

Held for trading

 

 

 

 

 

 

 

 

Derivative financial instruments not in a hedging relationship according to IAS 39

26

0

26

0

30

0

30

0

Available for sale

 

 

 

 

 

 

 

 

Investments

0

0

0

0

60

0

0

60

Securities

1

1

0

0

417

417

0

0

Derivative financial instruments in a hedging relationship according to IAS 39

23

0

23

0

22

0

22

0

Equity and liabilities

81

0

9

72

200

0

23

177

Held for trading

 

 

 

 

 

 

 

 

Derivative financial instruments not in a hedging relationship according to IAS 39

5

0

5

0

18

0

18

0

Miscellaneous financial liabilities

0

0

0

0

0

0

0

0

Other financial liabilities

 

 

 

 

 

 

 

 

Miscellaneous financial liabilities

72

0

0

72

177

0

0

177

Derivative financial instruments in a hedging relationship according to IAS 39

5

0

5

0

5

0

5

0

 

−31

1

40

−72

329

417

29

−117

The measurement of securities (level 1) is carried out based on quoted market prices on active markets.

Interest rate swaps and currency transactions (all level 2) are measured using the mark-to-market method based on quoted exchange rates and market yield curves.

No transfers between levels 1 and 2 were effected during the reporting period.

On the asset side, the level 3 measurements exclusively concern investments in real estate companies whose fair value was derived from third-party real estate valuations using the discounted cash flow method. Among others, these valuations are based on market rent assumptions and assumptions regarding possible vacancy rates. The fair value of these investments was determined after subtraction of liabilities and multiplication with the company’s share.

The level 3 measurements on the liabilities side include liabilities from put options of non-controlling interests and earn-out liabilities. The fair value measurement depends on the respective contract details and is carried out in the amount of €47 million (30/9/2014: €72 million) using the discounted cash flow method and in the amount of €130 million (30/9/2014: €0 million) in consideration of contractual value limits or based on current purchase price offers.

The fair values of liabilities from put options and earn-out liabilities, which are determined using the discounted cash flow method, are based on expected future cash flows over a detailed planning period of up to three years (30/9/2014: three years) plus a perpetuity. The assumed growth rate for the perpetuity is 1.0 per cent (30/9/2014: between 2.5 per cent and 8.7 per cent). In principle, the respective weighted average cost of capital (WACC) is used as the discount rate. In the reporting period, the cost of capital ranged from 5.6 per cent to 8.7 per cent (30/9/2014: between 11.6 per cent and 15.2 per cent). If individual interest rates were to increase by 10 per cent, the fair value of these liabilities would decline by €1 million (30/9/2014: €6 million). An interest rate decrease of 10 per cent would increase the fair value of these liabilities by €2 million (30/9/2014: €8 million).

Changes in the value of put options and earn-out liabilities developed as follows between 1 October 2014 and 30 September 2015:

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€ million

2013/14

2014/15

As of 1/10

78

72

Transfer to level 3

0

0

Transfer from level 3

0

0

Total gains (−) or losses (+) for the period

1

0

Profit or loss for the period

0

0

Other comprehensive income

1

0

Other changes in value outside of profit or loss

−7

69

Transaction-related changes

0

36

Granting of new rights

0

36

Redemption of existing rights

0

0

As of 30/9

72

177

The changes in value of put options of non-controlling interests and earn-out liabilities existing as of 30 September 2015 include €48 million from the recognition of put options in debt by means of a reclassification from equity. In addition, goodwill increased by €57 million.

Changes in the put options recognised as of 30 September 2014 lowered goodwill by €7 million and other comprehensive income by €1 million.

Financial instruments that are recognised at amortised cost in the balance sheet, but for which the fair value is stated in the notes, are also classified according to a three-level fair value hierarchy.

Due to their mostly short terms, the fair values of receivables due from suppliers, trade receivables and liabilities as well as cash and cash equivalents essentially correspond to their carrying amounts.

The measurement of the fair value of bonds, liabilities to banks and promissory note loans is based on the market interest rate curve following the zero-coupon method in consideration of credit spreads (level 2). The amounts comprise the interest prorated to the closing date.

The fair values of all other financial assets and liabilities that are not listed on an exchange correspond to the present value of payments underlying these balance sheet items. The calculation was based on the applicable country-specific yield curves (level 2) as of the closing date.