25 Additional disclosures on financial instruments

The carrying amount of each financial instrument represents a reasonable estimate for the fair value with the exception of the following positions:

Measurement hierarchy

Measurements at fair value in the balance sheet are classified using a three-level hierarchy based on the type and quality of the fair values (market prices). The following levels exist:

Level 1: Publicly quoted market prices for the respective financial instrument (e.g. stock market prices).

Level 2: Market prices that are not generally accessible and possibly derived from prices for similar financial instruments or underlying goods.

Level 3: Prices that are not based on market data

Fair value hierarchy

Recurring measurement of

Recurring measurement of

There are currently no indications for a one-time measurement of a fair value.

In the Repower Group, transfers of positions measured at fair value to and from a level generally take place at the end of the period. There were no transfers between levels at the end of 2013. There were no changes in the measurement methods nor were positions measured at fair value shifted within the individual categories.

Change in positions reported under assets

Forward exchange transactions and interest rate swaps under the group of derivative financial instruments as well as shares, bonds, other securities under the group of non-derivative financial instruments are components of the balance sheet position “securities and other financial instruments”. The energy trading transactions under the group of derivative financial instruments correspond to the balance sheet position “positive replacement values held-for-trading positions”.

Change in positions reported under liabilities

Forward exchange transactions and interest rate swaps under the group of derivative financial instruments are components of the balance sheet positions “non-current financial liabilities” and “current financial liabilities”. The energy trading transactions under the group of derivative financial instruments correspond to the balance sheet position “negative replacement values held-for-trading positions”. Loans and leasing commitments under the group of financial instruments that are not measured at fair value are components of the balance sheet position “non-current financial liabilities”.

Basic measurement methods and assumptions

Fair values are determined by applying standard market measurement methods taking into account the market data available on the measurement date. The measurement methods and assumptions used to calculate fair values are as follows:

The price curves of the last trading day for the various products and maturities on stock exchanges or with brokers are incorporated into the measurement of the energy trading transactions (positive/negative replacement values of the held-for-trading positions) classified as Level 1 and 2. The replacement value is the difference in price compared to the closing price.

Observable currency curves of active markets are incorporated into the fair value measurement of forward exchange transactions. Interest differences between individual currencies are taken into account when determining the fair value.

Observable yield curves of active markets are incorporated into the fair value measurement of interest rate swaps.

A present value calculation is used to determine the fair value of the non-current loan. Observable capital market rates of active markets are used as input parameters and increased by Repower's observable credit risk. Loans in euros are converted to Swiss francs at the closing rate.

The table below shows the financial assets that were netted as well as enforceable global netting agreements and similar agreements: