Information on financial instruments
The carrying amounts and fair values of financial assets and liabilities in accordance with IFRS 7 are shown in > TABLE 27.
Whereas lease liabilities arising from sale-and-leaseback transactions stood at €874.4 million (31 December 2015: €855.6 million), lease receivables arising from sale-and-leaseback transactions amounted to €597.8 million (31 December 2015: €592.0 million) and leased assets under sale-and-leaseback transactions totalled €302.2 million (31 December 2015: €285.9 million).
The finance lease obligations reported in other financial liabilities comprise liabilities arising from the financing of industrial trucks for short-term rental of €397.7 million (31 December 2015: €403.2 million). They are mainly allocated to the Financial Services segment and result from the intra-group financing provided by the Financial Services segment for the short-term rental business of the Linde Material Handling and STILL brand segments. Within other liabilities, the KION Group has also recognised finance lease obligations amounting to €20.0 million (31 December 2015: €18.1 million) arising from procurement leases, which are classified as finance leases due to their terms and conditions.
The non-consolidated subsidiaries and other equity investments that are shown as at 31 March 2016 in > TABLE 27 are carried at cost less impairment losses, as observable fair values are not available and reliable results cannot be obtained using other permitted measurement techniques. At present there is no intention to sell these financial instruments. At the end of 2015, non-consolidated subsidiaries and other equity investments had also included the shares, measured at fair value, in Moden Diesel S.p.A. (formerly MODEN DIESEL S.R.L.) and LR Intralogistik GmbH, which were fully consolidated on 1 January 2016.
Carrying amounts and fair values broken down by class |
27 |
|||||||
|
31/03/2016 |
31/12/2015 |
||||||
in € million |
Carrying amount |
Fair value |
Carrying amount |
Fair value |
||||
|
||||||||
Financial assets |
|
|
|
|
||||
Non-consolidated subsidiaries and other investments |
22.4 |
22.4 |
42.4 |
42.4 |
||||
Loans receivable |
2.3 |
2.3 |
2.7 |
2.7 |
||||
Financial receivables |
18.0 |
18.0 |
15.4 |
15.4 |
||||
Non-current securities |
0.8 |
0.8 |
0.8 |
0.8 |
||||
Lease receivables1 |
658.8 |
665.5 |
653.7 |
658.4 |
||||
Trade receivables |
692.6 |
692.6 |
670.5 |
670.5 |
||||
thereof gross amount due from customers for contract work2 |
10.0 |
10.0 |
1.5 |
1.5 |
||||
Other financial receivables |
49.2 |
49.2 |
43.0 |
43.0 |
||||
thereof non-derivative receivables |
36.2 |
36.2 |
37.7 |
37.7 |
||||
thereof derivative financial instruments |
13.0 |
13.0 |
5.3 |
5.3 |
||||
Cash and cash equivalents |
96.6 |
96.6 |
103.1 |
103.1 |
||||
|
|
|
|
|
||||
Financial liabilities |
|
|
|
|
||||
Liabilities to banks |
736.2 |
736.3 |
225.9 |
225.9 |
||||
Corporate bond |
– |
– |
444.5 |
469.5 |
||||
Other financial liabilities to non-banks |
7.2 |
7.2 |
6.2 |
6.2 |
||||
Lease liabilities1 |
874.4 |
881.7 |
855.6 |
860.0 |
||||
Trade payables |
595.9 |
595.9 |
574.6 |
574.6 |
||||
Other financial liabilities |
495.7 |
499.4 |
510.1 |
512.2 |
||||
thereof non-derivative liabilities |
48.0 |
48.0 |
58.6 |
58.6 |
||||
thereof liabilities from finance leases1 |
435.4 |
439.0 |
439.0 |
441.2 |
||||
thereof derivative financial instruments |
12.3 |
12.3 |
12.4 |
12.4 |
||||
Fair value measurement and assignment to classification levels
The following tables show the assignment of fair values to the individual classification levels as defined by IFRS 13 for financial instruments measured at fair value. > TABLES 28 – 29
Financial instruments measured at fair value |
28 |
|||
|
Fair Value Hierarchy |
|
||
in € million |
Level 1 |
Level 2 |
Level 3 |
31/03/2016 |
Financial assets |
|
|
|
13.8 |
thereof non-current securities |
0.8 |
|
|
0.8 |
thereof derivative instruments |
|
13.0 |
|
13.0 |
|
|
|
|
|
Financial liabilities |
|
|
|
12.3 |
thereof derivative instruments |
|
11.8 |
0.6 |
12.3 |
Financial instruments measured at fair value |
29 |
|||
|
Fair Value Hierarchy |
|
||
in € million |
Level 1 |
Level 2 |
Level 3 |
31/12/2015 |
Financial assets |
|
|
|
25.7 |
thereof investments in non-consolidated subsidiaries and other investments |
|
|
19.6 |
19.6 |
thereof non-current securities |
0.8 |
|
|
0.8 |
thereof derivative instruments |
|
5.3 |
|
5.3 |
|
|
|
|
|
Financial liabilities |
|
|
|
12.4 |
thereof derivative instruments |
|
11.9 |
0.6 |
12.4 |
Level 1 comprises long-term securities for which the fair value is calculated using prices quoted in an active market.
All currency forwards are classified as Level 2. The fair value of the currency forwards is calculated by the system using the discounting method based on forward rates on the reporting date. The default risk for the Group and for the counterparty is taken into account on the basis of gross figures.
The financial liabilities allocated to Level 3 relate to a call option of Weichai Power on 10.0 per cent of the shares in Linde Hydraulics. The unobservable inputs that were significant to fair value measurement as at the reporting date were unchanged compared with the end of 2015.
At 31 March 2016, the material changes in fair value and the impact on the income statement for the first three months of the year were as follows. > TABLE 30
Change in financial assets / liabilities classified as level 3 |
30 |
|
in € million |
Q1 2016 |
Q1 2015 |
Value as at 1/1/ |
–0.6 |
31.7 |
Gains recognised in net financial income / expenses |
0.0 |
0.4 |
Value as at 31/03/ |
–0.6 |
32.1 |
|
|
|
Gains for the period relating to financial assets / liabilities classified as Level 3 |
0.0 |
0.4 |
Change in unrealised gains / losses for the period relating to financial assets / liabilities held as at 31/03/ |
0.0 |
0.4 |
In order to eliminate default risk to the greatest possible extent, the KION Group only ever enters into derivatives with investment-grade counterparties.
If events or changes in circumstances make it necessary to reclassify financial instruments as a different level, they are reclassified at the end of a reporting period. No financial instruments were transferred between Levels 1, 2 or 3 in the first three months of 2016.