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[58] Other disclosures on financial instruments 

The following table presents the reconciliation of the balance sheet items to the classes of financial instruments in accordance with IFRS 7 and provides information on fair value measurement:

XLS

 

 

 

 

 

 

 

 

 

 

Subsequent measurement according to IAS 39

 

 

€ million

Carrying amount Dec. 31, 2013

Amortized cost

At cost

Fair value

Carrying amount according to IAS 17

Non-financial items

Fair value Dec. 31, 2013

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

980.8

980.8

–

–

–

–

980.8

Current financial assets

2,410.5

80.7

–

2,329.8

–

–

 

Held for trading
(non-derivatives)

–

–

–

–

–

–

–

Derivatives not in a hedging relationship

6.8

–

–

6.8

–

–

6.8

Held to maturity

53.4

53.4

–

–

–

–

53.4

Loans and receivables

27.3

27.3

–

–

–

–

27.3

Available-for-sale

2,312.1

–

–

2,312.1

–

–

2,312.1

Derivatives in a hedging relationship

10.9

–

–

10.9

–

–

10.9

Trade receivables

2,021.4

2,021.4

–

–

–

–

 

Loans and receivables

2,021.4

2,021.4

–

–

–

–

2,021.4

Current and non-current other assets

466.2

115.4

–

126.6

–

224.2

 

Derivatives not in a hedging relationship

2.9

–

–

2.9

–

–

2.9

Loans and receivables

115.4

115.4

–

–

–

–

115.4

Derivatives in a hedging relationship

123.7

–

–

123.7

–

–

123.7

Non-financial items

224.2

–

–

–

–

224.2

 

Non-current financial assets

77.8

15.8

52.3

9.7

–

–

 

Derivatives not in a hedging relationship

–

–

–

–

–

–

–

Held to maturity

–

–

–

–

–

–

–

Loans and receivables

15.8

15.8

–

–

–

–

15.8

Available-for-sale

57.3

–

52.3

5.0

–

–

57.3

Derivatives in a hedging relationship

4.7

–

–

4.7

–

–

4.7

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Current and non-current financial liabilities

3,697.9

3,630.8

–

59.4

7.7

–

 

Derivatives not in a hedging relationship

4.0

–

–

4.0

–

–

4.0

Other liabilities

3,630.8

3,630.8

–

–

–

–

3,916.6

Derivatives in a hedging relationship

55.4

–

–

55.4

–

–

55.4

Finance lease liabilities

7.7

–

–

–

7.7

–

7.7

Trade accounts payable

1,364.1

1,364.1

–

–

–

–

 

Other liabilities

1,364.1

1,364.1

–

–

–

–

1,364.1

Current and non-current other liabilities

1,140.1

581.1

–

2.1

–

556.9

 

Derivatives not in a hedging relationship

0.4

–

–

0.4

–

–

0.4

Other liabilities

581.1

581.1

–

–

–

–

581.1

Derivatives in a hedging relationship

1.7

–

–

1.7

–

–

1.7

Non-financial items

556.9

–

–

–

–

556.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsequent measurement according to IAS 39

 

 

€ million

Carrying amount Dec. 31, 2012

Amortized cost

At cost

Fair value

Carrying amount according to IAS 17

Non-financial items

Fair value Dec. 31, 2012

Assets

 

 

 

 

 

 

 

Cash and cash equivalents

729.7

729.7

–

–

–

–

729.7

Current financial assets

1,797.9

549.7

–

1,248.2

–

–

 

Held for trading
(non-derivatives)

–

–

–

–

–

–

–

Derivatives not in a hedging relationship

7.8

–

–

7.8

–

–

7.8

Held to maturity

349.7

349.7

–

–

–

–

349.7

Loans and receivables

200.0

200.0

–

–

–

–

200.3

Available-for-sale

1,230.1

–

–

1,230.1

–

–

1,230.1

Derivatives in a hedging relationship

10.3

–

–

10.3

–

–

10.3

Trade receivables

2,114.6

2,114.6

–

–

–

–

 

Loans and receivables

2,114.6

2,114.6

–

–

–

–

2,114.6

Current and non-current other assets

346.9

88.8

–

55.3

–

202.8

 

Derivatives not in a hedging relationship

2.7

–

–

2.7

–

–

2.7

Loans and receivables

88.8

88.8

–

–

–

–

88.8

Derivatives in a hedging relationship

52.6

–

–

52.6

–

–

52.6

Non-financial items

202.8

–

–

–

–

202.8

 

Non-current financial assets

97.1

48.0

41.8

7.3

–

–

 

Derivatives not in a hedging relationship

–

–

–

–

–

–

–

Held to maturity

30.0

30.0

–

–

–

–

30.0

Loans and receivables

18.0

18.0

–

–

–

–

18.0

Available-for-sale

48.7

–

41.8

6.9

–

–

48.7

Derivatives in a hedging relationship

0.4

–

–

0.4

–

–

0.4

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Current and non-current financial liabilities

4,453.5

4,284.2

–

159.5

9.8

–

 

Derivatives not in a hedging relationship

4.7

–

–

4.7

–

–

4.7

Other liabilities

4,284.2

4,284.2

–

–

–

–

4,715.7

Derivatives in a hedging relationship

154.8

–

–

154.8

–

–

154.8

Finance lease liabilities

9.8

–

–

–

9.8

–

9.8

Trade accounts payable

1,288.3

1,288.3

–

–

–

–

 

Other liabilities

1,288.3

1,288.3

–

–

–

–

1,288.3

Current and non-current other liabilities

1,105.6

522.9

–

15.0

–

567.7

 

Derivatives not in a hedging relationship

0.4

–

–

0.4

–

–

0.4

Other liabilities

522.9

522.9

–

–

–

–

522.9

Derivatives in a hedging relationship

14.6

–

–

14.6

–

–

14.6

Non-financial items

567.7

–

–

–

–

567.7

 

Net gains and losses on financial instruments mainly include measurement results from currency translation, fair value adjustments, impairments and reversals of impairments as well as the recognition of premiums and discounts. Dividends and interest are not recognized in the net gains and losses on financial instruments, except for dividends and interest in the category “held for trading”. At Merck, the category “held for trading” only includes derivatives not in a hedging relationship.

The net gains and losses on financial instruments by category on the reporting date were as follows:

XLS

 

 

 

 

 

 

 

 

Net gains or losses

€ million
2013

Interest

Impairments

Reversals of impairment

Fair value adjustments

Disposal gains/losses

Financial instrument of the category

 

 

 

 

 

Held for trading

–

–

–

131.7

–

Held to maturity

2.5

–

–

–

–

Loans and receivables

10.3

–47.2

42.1

–

–

Available-for-sale

15.1

–4.1

–

–

1.6

Other liabilities

–163.3

–

–

–

–

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gains or losses

€ million
2012

Interest

Impairments

Reversals of impairment

Fair value adjustments

Disposal gains/losses

Financial instrument of the category

 

 

 

 

 

Held for trading

–

–

–

44.4

–

Held to maturity

10.5

–

–

–

–

Loans and receivables

7.9

–69.9

42.4

–

–

Available-for-sale

11.4

–5.1

20.8

–

0.3

Other liabilities

–195.3

–

–

–

–

In 2013, foreign exchange gains of € 26.0 million resulting from receivables and payables in operating business, their economic hedging, as well as hedging of forecast transactions in operating business were recorded (2012: losses of € 60.4 million). Foreign exchange losses of € 4.3 million resulting from financial balance sheet items, their economic hedging as well as fair value fluctuations of option contracts to hedge forecast transactions were recorded (2012: gains of € 11.2 million).

The fair value of financial assets and liabilities is based on the official market prices and market values quoted on the balance sheet date (Level 1 assets and liabilities) as well as mathematical calculation models with inputs observable in the market on the balance sheet date (Level 2 assets and liabilities). Level 1 assets comprise stocks and bonds and are classified as “available-for-sale”, Level 1 liabilities comprise issued bonds and are classified as “other liabilities”. Level 2 assets and liabilities are primarily liabilities to banks classified as “other liabilities”, interest-bearing securities classified as “available-for-sale” as well as derivatives with and without hedging relationships. The fair value of interest-bearing securities is determined by discounting future cash flows using market interest rates. The fair value measurement of forward exchange contracts and currency options uses spot and forward rates as well as foreign exchange volatilities applying recognized mathematical principles. The fair value of interest rate swaps is determined with standard market valuation models using interest rate curves available in the market.

The fair values of the financial instruments disclosed in the balance sheet and the fair values deviating substantially from the carrying amount were determined as follows:

XLS

 

 

 

€ million
as of Dec. 31, 2013

Assets

Liabilities

Fair value determined by official prices and quoted market values (Level 1)

1,396.5

3,414.3

thereof available-for-sale

1,396.5

–

thereof other liabilities

–

3,414.3

Fair value determined using inputs observable in the market (Level 2)

1,069.6

563.8

thereof available-for-sale

920.6

–

thereof derivatives with a hedging relationship

139.3

57.1

thereof derivatives without a hedging relationship

9.7

4.4

thereof other liabilities

–

502.3

Fair value determined using inputs unobservable in the market (Level 3)

–

–

 

 

 

 

 

 

€ million
as of Dec. 31, 2012

Assets

Liabilities

Fair value determined by official prices and quoted market values (Level 1)

818.3

4,315.3

thereof available-for-sale

818.3

–

thereof other liabilities

–

4,315.3

Fair value determined using inputs observable in the market (Level 2)

492.5

574.9

thereof available-for-sale

418.7

–

thereof derivatives with a hedging relationship

63.3

169.4

thereof derivatives without a hedging relationship

10.5

5.1

thereof other liabilities

–

400.4

Fair value determined using inputs unobservable in the market (Level 3)

–

–

From an economic perspective, netting is only possible at Merck with derivatives. This possibility results from the framework agreements on derivatives trading which Merck enters into with commercial banks. However, Merck does not offset financial assets and financial liabilities in its balance sheet.

The following table presents the potential netting volume of the reported derivative financial assets and liabilities:

XLS

 

 

 

 

 

 

 

 

 

 

 

Potential netting volume

 

€ million
as of Dec. 31, 2013

Gross presentation

Saldierung

Net presentation

Due to master netting agreements

Due to financial collateral

Potential net amount

Derivative financial assets

149.0

–

149.0

45.9

–

103.1

Derivative financial liabilities

–61.5

–

–61.5

–45.9

–

–15.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Potential netting volume

 

€ million
as of Dec. 31, 2012

Gross presentation

Saldierung

Net presentation

Due to master netting agreements

Due to financial collateral

Potential net amount

Derivative financial assets

73.8

–

73.8

61.3

–

12.5

Derivative financial liabilities

–174.5

–

–174.5

–61.3

–

–113.2
© Merck KGaA, Darmstadt, Germany, Last Update 2014/03/06