Annual Report - EDP

notes to the consolidated EDP - and Energias company de Portugal, financial S.A. statementsfor the years ended 31 december 2012 and 2011Notes to the Consolidated and Company Financial Statementsfor the years ended 31 December 2012 and 2011Fair value of financial assets and liabilities as at 31 December 2012 and 2011 is analysed as follows:CarryingamountGroup Dec 2012 Group Dec 2011Fair value DifferenceCarryingamountFair valueDifferenceThousands of EurosFinancial assetsAvailable for sale investments 181,298 181,298 - 171,313 171,313 -Trade receivables 2,377,203 2,377,203 - 2,152,281 2,152,281 -Debtors and other assets from commercial activities 4,788,421 4,788,421 - 3,604,009 3,604,009 -Other Debtores and other assets 554,407 554,407 - 517,833 517,833 -Derivative financial instruments 276,840 276,840 - 321,514 321,514 -Financial assets at fair value through profit or loss 390 390 - 212 212 -Cash and cash equivalents 1,695,336 1,695,336 - 1,731,524 1,731,524 -9,873,895 9,873,895 - 8,498,686 8,498,686 -Financial liabilitiesFinancial debt 20,523,228 20,617,120 93,892 18,785,109 16,590,072 -2,195,037Suppliers and accruals1,901,156 1,901,156 - 1,899,155 1,899,155 -Institutional Partnerships in USA Wind Farms1,679,753 1,679,753 - 1,783,861 1,783,861 -Trade and other payables from commercial activities2,059,663 2,059,663 - 2,145,111 2,145,111 -Other liabilities and other payables569,637 569,637 - 688,602 688,602 -Derivative financial instruments 208,243 208,243 - 207,576 207,576 -26,941,680 27,035,572 93,892 25,509,414 23,314,377 -2,195,037Considering that the EDP Group’s structure of financial assets and liabilities booked at amortised cost has essentially a short term nature, the effect of changes in thefair value has not been considered. Fair value of EDP Group’s loans was determined considering current market interest rates.The market value of loans is calculated based on the discounted cash flows at market interest rates at the date of the balance sheet, increased by the best estimate, atthe same date, of market conditions applicable to the Group's debt, based on its average term.According to IFRS 7, EDP Group established the way it obtains the fair value of its financial assets and liabilities. The levels used are defined as follows: Level 1 – Fair value based on the available listed price (not adjusted) in the identified markets for assets and liabilities; Level 2 – Fair value based in market inputs not included in Level 1, but observable in the market for the asset or liability, either directly or indirectly; Level 3 – Fair value of the assets and liabilities calculated with inputs that are not based on observable market information.31 December 2012 31 December 2011Thousands of Euros Level 1 Level 2 Level 3 Level 1 Level 2 Level 3Financial assetsAvailable for sale investments 75,387 48,229 57,682 69,957 37,388 63,968Derivative financial instruments - 276,840 - - 321,514 -Financial assets at fair value through profit or loss390 - - 212 - -75,777 325,069 57,682 70,169 358,902 63,968Financial liabilitiesDerivative financial instruments - 208,243 - - 207,576 -- 208,243 - - 207,576 -As at 31 December 2012 and 2011, the movement in financial assets and liabilities included in Level 3 is analysed as follows:Available for saleinvestmentsThousands of Euros Dec 2012 Dec 2011Balance at beginning of year 63,968 91,898Change in fair value reserve -4,544 -17,934Acquisitions 3,701 2,952Disposals -1,126 -16,894Impairment -306 -121Transfers and other changes -4,011 4,067Balance at year end 57,682 63,96848. CO 2 LICENSESThe movements in the CO 2 licenses portfolio are analysed as follows:GroupCO 2 (Ton) Dec 2012 Dec 2011CO 2 licenses as at 1 January 9,899,228 240,239Licenses granted free of charge 18,063,481 17,970,369Licenses purchased 5,201,575 11,638,492Licenses transferred (from own consumption to trading) -693,289 -3,087,26232,470,995 26,761,838Licenses to be returned (consumed) 17,969,768 16,862,610Excess/(Lack) of licenses 14,501,227 9,899,228246A World Full Of Energy