15 Positive/negative replacement values for held-for-trading positions

15 Positive/negative replacement values for held-for-trading positions
  31.12.2011 31.12.2012
  CHF thousands    
  Positive replacement values 107,204 138,612
  Negative replacement values 85,076 126,024

The figures for the replacement values correspond to all financial instruments from energy trading transactions open on the balance sheet date. The replacement value corresponds to the fair value of the open financial instruments. Positive replacement values represent receivables and therefore an asset. Negative replacement values represent obligations and therefore a liability.

Replacement values of held-for-trading positions relate to forward contracts measured at fair value. Forward contracts cover forwards and futures with flexible profiles. The replacement value is obtained from the difference in price compared to the closing price. Price fluctuations for forward contracts are recognised by adjusting the replacement values, since there is no daily financial settlement of fluctuations in value.

Held-for-trading positions are used to hedge credit and market risks. If the counterparty fails to fulfil its obligations arising from the contract, the counterparty risk for the company corresponds to the positive replacement value. An obligation by the company towards the counterparty exists in the event of a negative replacement value. In this case the counterparty bears the risk. These risks related to held-for-trading positions are limited by imposing high requirements on contract partners' creditworthiness.