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.
|
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 |
||
|
||||||
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.
|
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 |
|
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.