Ársskýrsla Landsbankans - Landsbankinn

Notes to the Consolidated Financial Statements
6. Classification and fair value of financial assets and liabilities (continued)
The following tables show the line items in the consolidated income statement where the total gains (losses) were recognised during the years 2010
and 2009, for fair value measurements in Level 3:
1 January - 31 December 2010
Bonds and
debt
instruments
Equities and
equity
instruments
Contingent
bond Total
Interest expense - - (16,269) (16,269)
Net gain on financial assets designated as at fair value through profit or loss 350 185 - 535
Net foreign exchange gain (loss) (1,692) (174) - (1,866)
Total (1,342) 11 (16,269) (17,600)
1 January - 31 December 2009
Interest expense - - (10,241) (10,241)
Net gain on financial assets designated as at fair value through profit or loss 7,733 174 - 7,907
Net gain on financial assets and liabilities held for trading 665 28 - 693
Net foreign exchange gain (loss) 174 - - 174
Total 8,572 202 (10,241) (1,467)
The following table shows the line items in the consolidated income statement where gains (losses), relating only to financial assets and liabilities
held by the Group at 31 December 2010 and categorised in Level 3, were recognised:
Bonds and
debt
instruments
Equities and
equity
instruments
Contingent
bond Total
Fair value change of contingent bond - - (16,269) (16,269)
Net gain on financial assets designated as at fair value through profit or loss (868) 246 - (622)
Net foreign exchange gain (loss) (1,592) (134) - (1,726)
Total (2,460) 112 (16,269) (18,617)
Although the Group believes that its estimates of fair value are appropriate, the use of different valuation methodologies and assumptions could lead
to different measurements of fair value. The following table shows how profit before tax would have been affected if one or more of the inputs for
fair value measurements in Level 3 were changed to reasonably possible alternatives:
Effect on profit
before tax
Financial assets Favourable Unfavourable
Bonds and debt instruments 4,016 (2,948)
Equities and equity instruments 1,048 (1,048)
Total 5,064 (3,996)
Financial liabilities
Contingent bond 3,600 (1,800)
The effect on profit was calculated using methods suitable for the models used. For equities valued using comparables or recent transactions the
price was changed by +/-10%. For bonds issued by defaulting or greatly distressed parties the recovery value was changed by +/-500 basis points.
For the contingent bond the volatility of the value of the underlying assets was changed by +/-500 basis points.
NBI hf. Consolidated Financial Statements 2010 30
All amounts are in ISK million
130 Ársreikningur 2010 Allar upphæðir eru í milljónum króna