Annual Report 2013 | Suomeksi |

16 Financial assets and liabilities by categories

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Accounting policies + -
Financial assets
The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans and receivables and available for sale financial assets. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date.
Financial assets at fair value through profit or loss
A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected to be realised within 12 months of the closing date.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor. They are included in non-current assets, except for maturities under 12 months after the closing date. These are classified as current assets.
Available for sale financial assets
Available for sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless there is an intention to dispose of the investment within 12 months of the closing date.
Purchases and sales of investments are recognised on the trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Available for sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans are carried at amortised cost using the effective interest method. Gains and losses arising from changes in the fair value of the ’financial assets at fair value through profit or loss’ category are included in the income statement in the period in which they arise. Gains and losses arising from changes in the fair value of securities classified as available for sale are recognised in equity. When securities classified as available for sale are sold or impaired, the accumulated fair value adjustments are included in the income statement.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.
The Group assesses at each closing date whether there is objective evidence that a financial asset or a group of financial assets is impaired. If any such evidence exists for available for sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in the income statement.
Accounting for derivative financial instruments and hedging activities
Within the ordinary course of business the Group routinely enters into sale and purchase transactions for commodities. The majority of these transactions take the form of contracts that were entered into and continue to be held for the purpose of receipt or delivery of the commodity in accordance with the Group's expected sale, purchase or usage requirements. Such contracts are not within the scope of IAS 39. All other net-settled commodity contracts are measured at fair value with gains and losses taken to the income statement.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: (1) hedges of highly probable forecast transactions (cash flow hedges); (2) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (3) hedges of net investments in foreign operations. The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. Derivatives are divided into non-current and current based on maturity. Only for those electricity derivatives, which have cash flows in different years, the fair values are split between non-current and current assets or liabilities.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a liability, the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the cost of the asset or liability. When a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity is recognised in the income statement when the forecast transaction is ultimately also recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately recognised in the income statement.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortised to profit or loss for the period to maturity.
Net investment hedging in foreign operations
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity; the gain or loss relating to the ineffective portion is recognised immediately in the income statement. Gains and losses accumulated in equity are included in the income statement when the foreign operation is disposed off.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments hedging future cash flows do not qualify for hedge accounting. Fair value changes of these financial derivative instruments are recognised in items affecting comparability in the income statement.
Financial assets and liabilities in the tables below are split into categories in accordance with IAS 39. The categories are further split into classes which are the basis for valuing a respective asset or liability. Further information can be found in the Notes mentioned in the table.
Financial assets by categories 2013
Loans and
receivables
Financial assets at fair value
through profit and loss
EUR million Note Amortised
cost
Hedge
accounting,
fair value
hedges
Non-hedge
accounting
Fair value
recognised
in equity, cash
flow hedges
Available-
for-sale
financial
assets
Finance
leases
Total
financial
assets
Financial instruments in non-current assets
Other non-current assets 21 44 31 75
Derivative financial instruments 3
Electricity derivatives 40 42 82
Interest rate and currency derivatives 70 185 23 278
Oil and other futures and forward contracts 3 3
Long-term interest-bearing receivables 22 1,461 2 1,463
Financial instruments in current assets
Derivative financial instruments 3
Electricity derivatives 82 104 186
Interest rate and currency derivatives 80 3 83
Oil and other futures and forward contracts 28 0 28
Trade receivables 24 771 771
Other short-term interest-bearing receivables 24 6 6
Cash and cash equivalents 1) 25 1,269 1,269
Total 3,551 70 418 172 31 2 4,244
1) Cash and cash equivalents includes EUR 15 million related to assets held for sale.
Financial assets by categories 2012
Loans and
receivables
Financial assets at fair value
through profit and loss
EUR million Note Amortised
cost
Hedge
accounting,
fair value
hedges
Non-hedge
accounting
Fair value
recognised
in equity, cash
flow hedges
Available-
for-sale
financial
assets
Finance
leases
Total
financial
assets
Financial instruments in non-current assets
Other non-current assets 21 37 32 69
Derivative financial instruments 3
Electricity derivatives 34 42 76
Interest rate and currency derivatives 181 175 2 358
Oil and other futures and forward contracts 17 17
Long-term interest-bearing receivables 22 1,381 3 1,384
Financial instruments in current assets
Derivative financial instruments 3
Electricity derivatives 79 55 134
Interest rate and currency derivatives 38 4 42
Oil and other futures and forward contracts 45 2 47
Trade receivables 24 914 914
Other short-term interest-bearing receivables 24 9 9
Cash and cash equivalents 25 963 963
Total 3,304 181 388 105 32 3 4,013
Financial liabilities by categories 2013
Financial liabilities at fair value
through profit and loss
Other financial
liabilities
EUR million Note Hedge accounting,
fair value hedges
Non-hedge
accounting
Fair value
recognised
in equity, cash
flow hedges
Amortised
costs
Fair value Finance leases Total
financial
liabilities
Financial instruments in non-current liabilities
Interest-bearing liabilities 1) 28 5,656 1,299 2) 21 6,976
Derivative financial instruments 3
Electricity derivatives 28 7 35
Interest rate and currency derivatives 22 71 47 140
Oil and other futures and forward contracts 2 2
Financial instruments in current liabilities
Interest-bearing liabilities 1) 28 2,140 2 2,142
Derivative financial instruments 3
Electricity derivatives 24 0 24
Interest rate and currency derivatives 48 3 51
Oil and other futures and forward contracts 9 1 10
Trade payables 34 452 452
Other liabilities 34 140 140
Total 22 182 58 8,388 1,299 23 9,972
1) Including interest-bearing liabilities, EUR 20 million, in Liabilities related to assets held for sale at 31 December 2013 (2012: 0) of which EUR 4 million in current liabilities.
2) Fair valued part of bond in fair value hedge relationship.
Financial liabilities by categories 2012
Financial liabilities at fair value
through profit and loss
Other financial
liabilities
EUR million Note Hedge accounting,
fair value hedges
Non-hedge
accounting
Fair value
recognised
in equity, cash
flow hedges
Amortised
costs
Fair value Finance leases Total
financial
liabilities
Financial instruments in non-current liabilities
Interest-bearing liabilities 28 5,781 1,895 1) 23 7,699
Derivative financial instruments 3
Electricity derivatives 10 4 14
Interest rate and currency derivatives 108 57 165
Oil and other futures and forward contracts 3 3
Financial instruments in current liabilities
Interest-bearing liabilities 28 1,076 2 1,078
Derivative financial instruments 3
Electricity derivatives 18 1 19
Interest rate and currency derivatives 197 4 201
Oil and other futures and forward contracts 40 4 44
Trade payables 34 558 558
Other liabilities 34 228 228
Total - 376 70 7,643 1,895 25 10,009
1) Fair valued part of bond in fair value hedge relationship.
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