Additional Balance Sheet Disclosures in accordance with IFRS 7 (Financial Instruments)


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CARRYING AMOUNT OF FINANCIAL INSTRUMENTS BY MEASUREMENT CATEGORY UNDER IAS 39

 

 

 

 

€ million

 

Dec. 31, 2009

 

Dec. 31, 2008

Financial assets at fair value through profit or loss

 

574

 

878

Loans and receivables

 

53,093

 

52,751

Available-for-sale financial assets

 

24,414

 

13,450

Financial liabilities at fair value through profit or loss

 

565

 

407

Financial liabilities measured at amortized cost

 

90,944

 

81,728

RECONCILIATION OF BALANCE SHEET ITEMS TO CLASSES OF FINANCIAL INSTRUMENTS

The following table shows the reconciliation of the balance sheet items to the relevant classes of financial instruments, broken down by carrying amount and fair value of the financial instruments.

The fair value of financial instruments measured at amortized cost, such as receivables and liabilities, is calculated by discounting using a market rate of interest for a similar risk and matching maturity. For reasons of materiality, the fair value of current balance sheet items is deemed to be their carrying amount.

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RECONCILIATION OF BALANCE SHEET ITEMS TO CLASSES
OF FINANCIAL INSTRUMENTS AS OF DECEMBER 31, 2008

 

 

 

 

Measured at fair value

 

Measured at
amortized cost

 

Not within scope of IFRS 7

 

Other – not financial instruments

 

Balance sheet item at Dec. 31, 2008

€ million

 

Carrying  amount

 

Carrying  amount

 

Fair value

 

Carrying  amount

 

Carrying  amount

 

 

Noncurrent assets

 

 

 

 

 

 

 

 

 

 

 

 

Equity-accounted investments

 

 

 

 

6,373

 

 

6,373

Other equity investments

 

2

 

581

 

581

 

 

 

583

Financial services receivables

 

 

31,855

 

32,366

 

 

 

31,855

Other receivables and financial assets

 

1,666

 

1,456

 

1,456

 

 

265

 

3,387

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Trade receivables

 

 

5,969

 

5,970

 

 

 

5,969

Financial services receivables

 

 

27,035

 

27,035

 

 

 

27,035

Other receivables and financial assets

 

2,919

 

4,104

 

4,104

 

 

3,045

 

10,068

Marketable securities

 

3,770

 

 

 

 

 

3,770

Cash and cash equivalents

 

9,474

 

 

 

 

 

9,474

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent financial liabilities

 

100

 

33,157

 

33,410

 

 

 

33,257

Other noncurrent liabilities

 

1,150

 

436

 

436

 

 

1,649

 

3,235

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Current financial liabilities

 

 

36,123

 

36,123

 

 

 

36,123

Trade payables

 

 

9,676

 

9,676

 

 

 

9,676

Other current liabilities

 

1,189

 

2,544

 

2,544

 

 

4,812

 

8,545

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RECONCILIATION OF BALANCE SHEET ITEMS TO CLASSES OF
FINANCIAL INSTRUMENTS AS OF DECEMBER 31, 2009

 

 

 

 

Measured at fair value

 

Measured at
amortized cost

 

Not within scope of IFRS 7

 

Other – not financial instruments

 

Balance sheet item at Dec. 31, 2009

€ million

 

Carrying  amount

 

Carrying  amount

 

Fair value

 

Carrying  amount

 

Carrying  amount

 

 

Noncurrent assets

 

 

 

 

 

 

 

 

 

 

 

 

Equity-accounted investments

 

 

 

 

10,385

 

 

10,385

Other equity investments

 

 

543

 

543

 

 

 

543

Financial services receivables

 

 

33,174

 

33,264

 

 

 

33,174

Other receivables and financial assets

 

1,858

 

920

 

941

 

 

969

 

3,747

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

 

Trade receivables

 

 

5,692

 

5,692

 

 

 

5,692

Financial services receivables

 

 

27,403

 

27,403

 

 

 

27,403

Other receivables and financial assets

 

1,349

 

2,352

 

2,352

 

 

2,226

 

5,927

Marketable securities

 

3,330

 

 

 

 

 

3,330

Cash and cash equivalents

 

20,539

 

 

 

 

 

20,539

 

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Noncurrent financial liabilities

 

 

36,993

 

38,808

 

 

 

36,993

Other noncurrent liabilities

 

703

 

1,148

 

1,148

 

 

1,177

 

3,028

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Current financial liabilities

 

 

40,606

 

40,606

 

 

 

40,606

Trade payables

 

 

10,225

 

10,225

 

 

 

10,225

Other current liabilities

 

718

 

2,178

 

2,178

 

 

5,340

 

8,237

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BALANCE SHEET ITEMS MEASURED AT FAIR VALUE

 

 

€ million

 

Dec. 31, 2009

 

Level 1

 

Level 2

 

Level 3

Financial assets at fair value through profit or loss

 

 

 

 

 

 

 

 

Derivatives

 

3,205

 

 

3,007

 

198

 

 

 

 

 

 

 

 

 

Available-for-sale financial assets

 

 

 

 

 

 

 

 

Marketable securities

 

3,332

 

3,320

 

12

 

Cash and cash equivalents

 

20,539

 

20,539

 

 

Financial assets measured
at fair value

 

27,075

 

23,859

 

3,019

 

198

 

 

 

 

 

 

 

 

 

Financial liabilities at fair value through profit or loss

 

 

 

 

 

 

 

 

Derivatives

 

1,421

 

 

1,357

 

65

Financial liabilities measured
at fair value

 

1,421

 

 

1,357

 

65

The allocation of fair value to the three levels in the fair value hierarchy is based on the availability of observable market prices in an active market. Level 1 is used to report the fair value of financial instruments, for example cash and cash equivalents or marketable securities, for which a quoted price is available. Fair values in Level 2, e.g. of derivatives, are measured on the basis of market inputs such as exchange rates or yield curves using market-based valuation techniques. Level 3 fair values are calculated using valuation techniques that do not incorporate inputs that are directly observable in active markets. In the Volkswagen Group, Level 3 fair values primarily comprise long-term commodity futures because the prices available on the market must be extrapolated for measurement purposes. Options on equity instruments are also reported in Level 3.

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CHANGES IN BALANCE SHEET ITEMS MEASURED AT FAIR VALUE BASED ON LEVEL 3

 

 

 

€ million

 

Financial assets measured at fair value

 

Financial liabilities measured at fair value

Balance at Jan. 1, 2009

 

 

64

Total comprehensive income

 

184

 

37

recognized in profit or loss

 

42

 

5

recognized in other comprehensive income

 

142

 

32

Additions (purchases)

 

48

 

65

Transfers into Level 2

 

–34

 

–27

Balance at Dec. 31, 2009

 

198

 

65

 

 

 

 

 

Total gains or losses recognized
in profit or loss

 

42

 

5

Net other operating expense/income

 

 

of which attributable to assets/liabilities held at the reporting date

 

 

Financial result

 

42

 

5

of which attributable to assets/liabilities held at the reporting date

 

11

 

The transfers out of Level 3 into Level 2 comprise commodity futures for which observable quoted prices are available for measurement purposes due to the decline in their remaining maturities; consequently, no extrapolation is required.

Commodity prices are the key risk variable for the fair value of commodity futures. Sensitivity analyses are used to present the effect of changes in commodity prices on profit and equity.

If commodity prices for commodity futures classified as Level 3 had been 10% higher (lower) as of December 31, 2009, profit would have been €3 million and equity €54 million higher (lower).

The key risk variable for measuring options on equity instruments held by the Company is the relevant enterprise value. Sensitivity analyses are used to present the effect of changes in risk variables on profit.

If the assumed enterprise values had been 10% higher (lower), profit would have been €15 million higher (lower).

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CHANGES IN CREDIT RISK VALUATION ALLOWANCES ON FINANCIAL ASSETS

 

 

€ million

 

Specific  valuation  allowances

 

Portfolio-based  valuation  allowances

 

2009

 

Specific  valuation  allowances

 

Portfolio-based  valuation  allowances

 

2008

Balance at Jan. 1

 

1,155

 

619

 

1,774

 

991

 

563

 

1,554

Currency and other changes

 

37

 

18

 

56

 

58

 

5

 

63

Additions

 

1,348

 

118

 

1,467

 

741

 

115

 

856

Utilization

 

347

 

 

347

 

368

 

 

368

Reversals

 

249

 

286

 

535

 

182

 

149

 

331

Reclassification

 

–98

 

98

 

0

 

–85

 

85

 

0

Balance at Dec. 31

 

1,847

 

568

 

2,415

 

1,155

 

619

 

1,774

The valuation allowances mainly relate to the credit risks associated with the financial services business.

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