[6] Financial instruments

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Financial assets and liabilities measured at fair value

 

 

30.09.2016

 

31.12.2015

in € million

 

Level 1

 

Level 2

 

Level 3

 

Level 1

 

Level 2

 

Level 3

Investments and securities

 

420

 

 

 

 

 

415

 

 

 

 

Derivatives with positive fair values

 

 

 

188

 

 

 

 

 

316

 

 

Derivatives with negative fair values

 

 

 

638

 

 

 

 

 

675

 

 

For individual categories of financial assets and financial liabilities in The Linde Group, the carrying amount of the item is generally a reasonable approximation of the fair value of the item. This does not apply to receivables from finance leases or to financial debt. In the case of receivables from finance leases, the fair value is EUR 303 m, while the carrying amount is EUR 220 m. The fair value of the financial debt is EUR 9.860 bn, compared with its carrying amount of EUR 9.280 bn. The fair value of financial instruments is generally determined using quoted market prices. If no quoted market prices are available, the fair value is determined using measurement methods customary in the market, based on market parameters specific to the instrument. The investments and securities category also includes financial assets (available-for-sale financial assets) of EUR 18 m (31 December 2015: EUR 15 m) for which a fair value cannot be reliably determined. For these assets, there are neither observable market prices nor sufficient information for a reliable valuation using other valuation methods. There is currently no intention to sell these assets.

For derivative financial instruments, the fair value is determined as follows. Options are measured by external partners using Black-Scholes pricing models. Futures are measured with recourse to the quoted market price in the relevant market.

All other derivative financial instruments are measured by discounting future cash flows using the present value method. The starting parameters for these models should, as far as possible, be the relevant observable market prices and interest rates at the balance sheet date, obtained from recognised external sources.

During the reporting period, there were no transfers between Levels 1, 2 and 3 of the fair value hierarchy.