Cash and cash equivalents the fair value for this

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Unformatted text preview: s in 2011 entered into a cash-settled total return swap (TRS) in respect of 65,000,000 VimpelCom Ltd. ADRs (each representing one VimpelCom common share) with J.P. Morgan Securities Ltd. The agreement gives economic exposure to these shares. The share price 31 December 2011 was uSD 9.47. /page 69/ telenor annual report 2011 notes to the financial statements / telenor group / 31 / Fair values of financial instruments Principles for estimating fair values Based on the characteristics of the financial instruments that are recognised in the financial statements, the financial instruments are grouped into classes and categories as described in the table below. The estimated fair values of the Group’s financial instruments are based on market prices and the valuation methodologies per class are described below. Fair value hierarchy The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in measuring the fair value of financial instruments in the Fair value through profit and loss (“FVTPL”) and the Available for sale (“AFS”) categories: Level 1: Quoted prices (unadjusted) in active markets for identical financial instruments Level 2: Inputs other than quoted prices included within Level 1 that are observable for assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Inputs for assets or liabilities that are not based on observable market data (unobservable inputs). The table below includes analyses of financial instruments by their fair value hierarchy levels into which the fair value measurement is categorised. Interest-bearing liabilities Fair values of interest-bearing liabilities have been calculated using yield curves, which incorporates estimates of the Telenor ASA credit spread. The credit curve has been extrapolated using indicative prices on debt issuance by Telenor ASA for different maturities. The yield curves have been interpolated from cash and swap curves observed in the market for different currencies and maturities. Trade receivables and other current and non-current financial assets For trade receivables and other current receivables, the nominal amount, adjusted for allowance for bad debt, is assessed to be a reasonable approximation of fair value. The effect of not discounting is considered to be immaterial for this class of financial instruments. Trade payables and other non-interest-bearing financial liabilities For trade payables and other non-interest-bearing financial liabilities, the nominal amount is assessed to be a reasonable approximation of fair value. The effect of not discounting is considered to be immaterial for this class of financial instruments. Equity securities Fair values for listed shares are based on quoted prices at the end of the reporting period. Fair value of unlisted shares is calculated by using commonly used valuation techniques, or measured at cost if the investment does not have a quoted market price in an active market and the fair value cannot be reliably measured. Listed companies consolidated in the Group or accounted for using the equity method are not included in the table below. Cash and cash equivalents The fair value for this class of financial instruments is assessed to be equal to the nominal amount. Derivatives Fair value of currency swaps, foreign currency forward contracts and interest rate swaps is estimated based on calculating the net present value of future cash flows, using swap curves and exchange rates as of 31 December 2011 and 2010, respectively. The fair value of options is estimated using appropriate option pricing models. /page 70/ telenor annual report 2011 notes to the financial statements / telenor group NOK in millions Financial position item Note Fair value level Other non-current assets 23 2 3 Trade and other receivables 22 Other financial current assets 23 2 Cash and cash equivalents 24 Total – Fair value through profit and loss (FVTPL) Total – Available for sale (AFS) Total – Loans and receivables (LAR) Non-current interestbearing financial liabilities Non-current non-interestbearing financial liabilities Current interest-bearing financial liabilities Trade and other payables Current non-interestbearing liabilities 29 28 2 29 28 28 2 Category FVTPl AFs lAR NF 1) lAR NF 1) FVTPl lAR lAR Carrying amount Fair value 3 241 1 660 385 374 822 17 554 13 738 3 816 2 638 346 2 292 12 899 12 899 2 006 385 29 303 3 241 1 660 385 374 822 17 554 13 738 3 816 2 638 346 2 292 12 899 12 899 2 006 385 29 303 Fair values of financial instruments 31 december 2011 per class Trade payables and other Trade non Currency interest receivables interest Cash swaps rate Equity, interest and other bearing and cash and swaps and other bearing financial financial Equity equi forward and deriv liabilities assets liabilities securities valents contracts options atives - - - - - - 374 - - - - - - 385 - - - - - - 475 - - - 1 185 - - - - - - 13 738 - - - - - - - - - - - - - - - 2 292...
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This document was uploaded on 03/21/2014.

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