talanx group annual report 2011 en
talanx group annual report 2011 en
talanx group annual report 2011 en
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226<br />
Financial statem<strong>en</strong>ts Notes<br />
G<strong>en</strong>eral information<br />
Talanx Group. Annual Report <strong>2011</strong><br />
Accounting principles<br />
and policies<br />
(11) Fair value hierarchy<br />
Segm<strong>en</strong>t <strong>report</strong>ing Consolidation,<br />
business combinations<br />
Non-curr<strong>en</strong>t assets held for<br />
sale and disposal <strong>group</strong>s<br />
Fair value hierarchy<br />
For the purposes of the disclosure requirem<strong>en</strong>ts pursuant to IFRS 7 “Financial Instrum<strong>en</strong>ts: Disclosures”,<br />
the financial instrum<strong>en</strong>ts to be recognised at fair value in the balance sheet must be assigned<br />
to a three-level fair value hierarchy. The purpose of this new requirem<strong>en</strong>t, inter alia, is to set out the<br />
market proximity of the data included in the determination of fair values. The following classes<br />
of financial instrum<strong>en</strong>t are affected: financial assets available for sale, financial assets at fair value<br />
through profit or loss, other financial assets – insofar as they are recognised at fair value, negative<br />
fair values from derivative financial instrum<strong>en</strong>ts (included in the balance sheet item “Other liabilities”),<br />
as well as hedging instrum<strong>en</strong>ts (derivatives in the context of hedge accounting).<br />
Breakdown of financial assets measured at fair value<br />
The financial assets recognised at fair value were allocated as follows as at the balance sheet date in<br />
accordance with the three levels of the fair value hierarchy:<br />
Level 1: Quoted prices (unadjusted) in active markets for id<strong>en</strong>tical assets and liabilities. This<br />
includes, first and foremost, listed equities, futures and options, investm<strong>en</strong>t funds and highly<br />
liquid bonds traded on regulated markets. As at the balance sheet date the proportion of financial<br />
instrum<strong>en</strong>ts in the total portfolio of financial assets measured at fair value allocated to level 1 was<br />
36 (45)%.<br />
Level 2: Inputs used for measurem<strong>en</strong>t that are based on observable market data and are not<br />
included in level 1. This level includes, for example, assets measured on the basis of interest rate<br />
curves, such as borrower’s note loans and registered deb<strong>en</strong>tures. Market prices of bonds of limited<br />
liquidity, such as corporate bonds, are also allocated to level 2. Altogether, 61 (52)% of the financial<br />
instrum<strong>en</strong>ts recognised at fair value were allocated to this level as at the balance sheet date.<br />
Level 3: Inputs used for measurem<strong>en</strong>t that are not based on observable market data (unobservable<br />
inputs). This level includes primarily unlisted equity securities. As at the balance sheet date,<br />
the Group allocated 3 (3)% of the financial assets recognised at fair value to this category.
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