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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30/9/2015

 

 

 

 

 

 

 

 

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

Financial liabilities 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

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30/9/2016

 

 

 

 

 

 

 

 

Balance sheet value

 

 

 

 

 

 

 

€ million

Carrying amount

(Amortised) cost

Fair value through profit or loss

Fair value outside of profit or loss

Fair value

Assets

24,952

n/a

n/a

n/a

n/a

Loans and receivables

3,140

3,140

0

0

3,141

Loans and advance credit granted

58

58

0

0

58

Receivables due from suppliers

1,774

1,774

0

0

1,774

Trade receivables

808

808

0

0

808

Miscellaneous financial assets

500

500

0

0

501

Held to maturity

0

0

0

0

0

Miscellaneous financial assets

0

0

0

0

0

Held for trading

4

0

4

0

4

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

4

0

4

0

4

Available for sale

24

23

0

2

n/a

Investments

23

23

0

0

n/a

Securities

2

0

0

2

2

Derivative financial instruments in a hedging relationship according to IAS 39

2

0

0

2

2

Cash and cash equivalents

2,368

2,368

0

0

2,368

Receivables from finance leases (amount according to IAS 17)

32

n/a

n/a

n/a

46

Assets not classified according to IFRS 7

19,382

n/a

n/a

n/a

n/a

Equity and liabilities

24,952

n/a

n/a

n/a

n/a

Held for trading

10

0

10

0

10

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

10

0

10

0

10

Other financial liabilities

14,441

14,360

54

26

14,586

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

3,508

3,507

0

0

3,652

Trade liabilities

9,383

9,383

0

0

9,383

Miscellaneous financial liabilities

1,550

1,470

54

26

1,550

Derivative financial instruments in a hedging relationship according to IAS 39

4

0

0

4

4

Liabilities from finance leases (amount according to IAS 17)

1,251

n/a

n/a

n/a

1,577

Liabilities not classified according to IFRS 7

9,246

n/a

n/a

n/a

n/a

Classes were formed based on similar risks for the respective financial instruments and generally correspond to the categories of IAS 39. The table above provides a more detailed breakdown of individual financial assets and liabilities. For individual additional disclosures the classes of the respective disclosure were aggregated to homogenous classes. 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 €23 million (30/9/2015: €69 million), €23 million (30/9/2015: €9 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.

In addition, securities totalling €2 million (30/9/2015: €417 million) are recognised outside of profit or loss. These primarily concern highly liquid exchange-listed money market funds.

Miscellaneous financial liabilities include liabilities from put options of non-controlling interests in the amount of €71 million (30/9/2015: €156 million) and earn-out liabilities (contingent consideration in the context of corporate acquisitions) in the amount of €9 million (30/9/2015: €21 million). Of this amount, €26 million (30/9/2015: €112 million) is recognised at fair value outside of profit or loss and €54 million (30/9/2015: €65 million) is 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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30/9/2015

30/9/2016

 

 

 

 

 

 

 

 

 

€ million

Total

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Assets

529

417

52

60

8

2

6

0

Held for trading

 

 

 

 

 

 

 

 

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

30

0

30

0

4

0

4

0

Available for sale

 

 

 

 

 

 

 

 

Investments

60

0

0

60

0

0

0

0

Securities

417

417

0

0

2

2

0

0

Derivative financial instruments in a hedging relationship according to IAS 39

22

0

22

0

2

0

2

0

Equity and liabilities

200

0

23

177

94

0

14

80

Held for trading

 

 

 

 

 

 

 

 

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

18

0

18

0

10

0

10

0

Miscellaneous financial liabilities

0

0

0

0

0

0

0

0

Other financial liabilities

 

 

 

 

 

 

 

 

Miscellaneous financial liabilities

177

0

0

177

80

0

0

80

Derivative financial instruments in a hedging relationship according to IAS 39

5

0

5

0

4

0

4

0

 

329

417

29

−117

−86

2

−8

−80

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 of the previous year 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 €35 million (30/9/2015: €47 million) using the discounted cash flow method and in the amount of €45 million (30/9/2015: €130 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 eleven years (30/9/2015: up to three years) plus a perpetuity. The assumed growth rate for the perpetuity is 1.0 per cent (30/9/2015: 1.0 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 to 13.9 per cent (30/9/2015: between 5.6 and 8.7 per cent). If individual interest rates were to increase by 10 per cent, the fair value of these liabilities would decline by €1 million (30/9/2015: €1 million). An interest rate decrease of 10 per cent would increase the fair value of these liabilities by €1 million (30/9/2015: €2 million).

Changes in the value of put options and earn-out liabilities developed as follows between 1 October 2015 and 30 September 2016:

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€ million

2014/15

2015/16

As of 1/10

72

177

Transfer to level 3

0

0

Transfer from level 3

0

0

Gains (−) and losses (+) for the period

2

4

Profit or loss for the period

(1)

(1)

Other comprehensive income

(1)

(3)

Change in goodwill

21

10

Other changes in value outside of profit or loss

82

−110

As of 30/9

177

80

The development presented here includes transaction-related changes totalling €−95 million. Redemption of existing rights account for €112 million and the granting of new rights for €17 million, which, at €7 million, is shown in other comprehensive income and, at €10 million, in change in goodwill. Redemption of existing rights is part of other changes in value outside of profit or loss.

There were no transfers to or from level 3 during the current financial year or the previous year.

During the previous year, the change in put options of non-controlling shareholders that existed as of 30 September 2015 included the recognition of put options in debt by means of a reclassification from equity in the amount of €44 million. In addition, goodwill increased by €21 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 curve (level 2) as of the closing date.