Information on financial instruments

The carrying amounts and fair values of financial assets and liabilities in accordance with IFRS 7 are shown in the following table.

Carrying amounts and fair values broken down by class

 

Sep 30, 2020

Dec 31, 2019

in € million

Carrying amount

Fair value

Carrying amount

Fair value

Financial assets

 

 

 

 

Lease receivables1

1,531.1

1,530.8

1,421.0

1,427.4

Trade receivables

1,093.0

1,093.0

1,074.2

1,074.2

Other financial assets

129.2

129.2

118.7

118.7

thereof financial investments

12.9

12.9

14.4

14.4

thereof financial receivables

17.9

17.9

23.9

23.9

thereof other financial investments

23.3

23.3

24.2

24.2

thereof sundry financial assets

55.2

55.2

44.3

44.3

thereof derivative financial instruments

19.9

19.9

12.0

12.0

Cash and cash equivalents

429.0

429.0

211.2

211.2

 

 

 

 

 

Financial liabilities

 

 

 

 

Financial liabilities

2,296.6

2,310.3

1,820.5

1,827.7

thereof promissory notes

1,320.3

1,325.5

1,317.3

1,323.9

thereof bonds

494.2

502.7

thereof liabilities to banks

261.6

261.6

498.3

498.9

thereof other financial liabilities

220.5

220.5

4.9

4.9

Liabilities from financial services

2,772.3

2,786.4

2,500.2

2,515.4

Lease liabilities1

284.1

285.8

432.1

435.3

Trade payables

943.0

943.0

975.9

975.9

Other financial liabilities

754.6

764.4

784.9

794.7

thereof liabilities from procurement leases1

527.6

536.7

486.1

494.6

thereof liabilities from short-term rental fleet financing1

111.7

112.4

178.6

179.9

thereof sundry financial liabilities and liabilities from accrued interest

89.1

89.1

96.0

96.0

thereof derivative financial instruments

26.2

26.2

24.3

24.3

1

as defined by IFRS 16

Fair value measurement

The following tables show the assignment of fair values to the individual levels as defined by IFRS 13 for financial instruments measured at fair value.

Financial instruments measured at fair value

 

Fair Value Hierarchy

in € million

Level 1

Level 2

Level 3

Sep 30, 2020

Financial assets

 

 

 

76.6

thereof financial investments

1.9

 

11.0

12.9

thereof other financial investments

 

23.3

 

23.3

thereof trade receivables

 

20.5

 

20.5

thereof derivative financial instruments

 

19.9

 

19.9

 

 

 

 

 

Financial liabilities

 

 

 

26.2

thereof derivative financial instruments

 

26.2

 

26.2

Financial instruments measured at fair value

 

Fair Value Hierarchy

in € million

Level 1

Level 2

Level 3

Dec 31, 2019

Financial assets

 

 

 

55.3

thereof financial investments

3.2

 

11.2

14.4

thereof other financial investments

 

24.2

 

24.2

thereof trade receivables

 

4.8

 

4.8

thereof derivative financial instruments

 

12.0

 

12.0

 

 

 

 

 

Financial liabilities

 

 

 

24.3

thereof derivative financial instruments

 

24.3

 

24.3

Level 1 comprises the financial investment in Balyo SA, for which the fair value is calculated using prices quoted in an active market.

The fair value of other financial investments is determined using prices quoted in an active market and other observable inputs. They are assigned to Level 2.

Trade receivables that are recognized at fair value through profit or loss are assigned to Level 2. Their fair value is calculated using the transaction price achievable in an active market. The biggest influence on the transaction price is the default risk of the counterparty.

Interest-rate swaps and currency forwards are also classified as Level 2. The fair value of derivative financial instruments is determined using appropriate valuation methods on the basis of the observable market information at the reporting date. The default risk for the Group and for the counterparty is taken into account on the basis of gross figures. The fair value of interest-rate swaps is calculated as the present value of the future cash flows. Both contractually agreed payments and forward interest rates are used to calculate the cash flows, which are then discounted on the basis of a yield curve that is observable in the market. The fair value of the currency forwards is calculated by the system using the discounting method based on forward rates on the reporting date.

In order to eliminate default risk to the greatest possible extent, the KION Group only enters into derivatives with investment-grade counterparties.

Level 3 essentially comprises the financial investment in Zhejiang EP Equipment Co., Ltd. The fair value is determined using appropriate valuation methods that draw on observable inputs to the greatest possible extent. If no observable inputs are available, unobservable inputs are used.

If events or changes in circumstances make it necessary to reclassify financial instruments to a different level, this is done at the end of a reporting period.

Hedge accounting

Potential ineffective portions of existing hedges were deemed immaterial as at September 30, 2020.