Note 15 - Measurement of fair value of financial instruments

Financial instruments at fair value are classified at various levels.

Level 1: Valuation based on quoted prices in an active market

Fair value of financial instruments that are traded in the active markets is based on market price on the balance sheet date. A market is considered active if market prices are easily and regularly available from a stock exchange, dealer, broker, industry group, price-setting service or regulatory authority, and these prices represent actual and regularly occurring market transactions at an arm’s length. This category also includes quoted shares and Treasury bills.

Level 2: Valuation based on observable market data

Level 2 consists of instruments that are valued by the use of information that does not consist in quoted prices, but where the prices are directly or indirectly observable for the assets or liabilities concerned, and which also include quoted prices in non-active markets.

Level 3: Valuation based on other than observable data

If valuation data are not available for level 1 and 2, valuation methods are applied that are based on non-observable information.

The following table presents the Group's assets and liabilities measured at fair value at 30 June 2015: 
         
Assets (NOKm) Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit/loss        
-Derivatives 32 5,820 - 5,851
-Bonds and money market certificates 3,102 11,980 - 15,082
-Equity instruments 700 - 607 1,307
-Fixed interest loans - 43 4,677 4,719
Financial assets avaliable for sale        
-Equity instruments - - 40 40
Total assets 3,833 17,842 5,324 26,999
         
Liabilities Level 1 Level 2 Level 3 Total
Financial liabilities through profit/loss        
-Derivatives 32 4,579 - 4,610
Total liabilities 32 4,579 - 4,610

 

The following table presents the Group's assets and liabilities measured at fair value at 30 June 2014: 
         
Assets (NOKm) Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit/loss        
-Derivatives 227 4,957 - 5,184
-Bonds and money market certificates 3,719 12,080 - 15,799
-Equity instruments 49 - 1,038 1,087
-Fixed interest loans - 43 2,531 2,573
Financial assets avaliable for sale        
-Equity instruments - - 36 36
Total assets 3,996 17,080 3,605 24,680
         
Liabilities Level 1 Level 2 Level 3 Total
Financial liabilities through profit/loss        
-Derivatives 763 3,363 - 4,126
Total liabilities 763 3,363 - 4,126

 

 

The following table presents the Group's assets and liabilities measured at fair value at 31 December 2014: 
         
Assets (NOKm) Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit/loss        
-Derivatives 326 7,551 - 7,877
-Bonds and money market certificates 3,859 10,318 - 14,177
-Equity instruments 48 - 625 673
-Fixed interest loans - 43 3,277 3,320
Financial assets avaliable for sale        
-Equity instruments - - 35 35
Total assets 4,233 17,911 3,937 26,082
         
Liabilities Level 1 Level 2 Level 3  Total 
Financial liabilities through profit/loss        
-Derivatives 324 5,928 - 6,252
Total liabilities 324 5,928 - 6,252

 

The following table presents the changes in the instruments classified in level 3 as at 30 June 2015: 
         
(NOKm) Fixed interest loans Equity instruments through profit/loss Equity instruments available for sale Total
Opening balance 1 January 2015 3,277 625 35 3,937
Investment in period 1,690 8 3 1,701
Disposals in the period -267 -22 -2 -291
Gain or loss on financial instruments 40 -4 3 40
Change in reference rate in fair value model for fixed interest rate loans -64 - - -64
Closing balance 30 June 15 4,677 607 40 5,324

 

The following table presents the changes in the instruments classified in level 3 as at 30 June 2014: 
         
(NOKm) Fixed interest loans Equity instruments through profit/loss Equity instruments available for sale Total
Opening balance 1 January 2014 2,656 909 40 3,605
Investment in period 21 16 - 37
Disposals in the period -153 -80 - -233
Gain or loss on financial instruments 6 192 -3 195
Closing balance 30 June 14 2,531 1,038 36 3,605

 

The following table presents the changes in the instruments classified in level 3 as at 31 December 2014: 
         
(NOKm) Fixed interest loans Equity instruments through profit/loss Equity instruments available for sale Total
Opening balance 1 January 2014 2,656 909 40 3,605
Investment in period 946 38 3 987
Disposals in the period -389 -341 -4 -733
Gain or loss on financial instruments 64 19 -4 79
Closing balance 31 December 14 3,277 625 35 3,937
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