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 31 December 2016: 
         
Assets (NOKm) Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit/loss        
- Derivatives 44 4.708 - 4.752
- Bonds and money market certificates 2.511 15.046 - 17.557
- Equity instruments 959 - 524 1.483
- Fixed interest loans - 43 3.783 3.826
Financial assets avaliable for sale        
- Equity instruments - - 60 60
Total assets 3.514 19.796 4.367 27.676
         
Liabilities Level 1 Level 2 Level 3 Total
Financial liabilities through profit/loss        
- Derivatives 48 4.026 - 4.074
- Equity instruments 173 8 - 181
Total liabilities 221 4.034 - 4.255

 

The following table presents the Group's assets and liabilities measured at fair value at 31 December 2015: 
         
Assets (NOKm) Level 1 Level 2 Level 3 Total
Financial assets at fair value through profit/loss        
- Derivatives 39 7.485 - 7.524
- Bonds and money market certificates 2.207 13.545 - 15.752
- Equity instruments 803 - 574 1.377
- Fixed interest loans - 43 4.405 4.447
Financial assets avaliable for sale        
- Equity instruments - - 108 108
Total assets 3.048 21.073 5.087 29.207
         
Liabilities Level 1 Level 2 Level 3 Total
Financial liabilities through profit/loss        
- Derivatives 44 5.371 - 5.414
- Equity instruments 385 9 - 394
Total liabilities 429 5.380 - 5.808

 

 

 

The following table presents the changes in the instruments classified in level 3 as at 31 December 2016: 
         
(NOKm) Fixed interest loans Equity instruments through profit/loss Equity instruments available for sale Total
Opening balance 1 January 4.405 574 108 5.087
Investment in periode 770 28 1 799
Disposals in the periode -1.347 -66 - -1.413
Gain or loss on financial instruments -44 -13 -50 -106
Closing balance  3.783 524 60 4.367

 

The following table presents the changes in the instruments classified in level 3 as at 31 December 2015: 
         
(NOKm) Fixed interest loans Equity instruments through profit/loss Equity instruments available for sale Total
Opening balance 1 January 3.277 625 35 3.937
Investment in periode 2.224 20 - 2.244
Disposals in the periode -1.000 -63 -2 -1.065
Gain or loss on financial instruments -33 -7 75 34
Change in valuation model for fixed interest loans -64 - - -64
Closing balance  4.405 574 108 5.087

 

 

 

 

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