For the purposes of the disclosure requirements pursuant to International Financial Reporting Standards – IFRS 13, financial instruments that are to be recognised at fair value must be assigned to a three-level fair value hierarchy as must those assets and liabilities recognised at Purchase cost cost for which a disclosure of fair value is required in connection with annual reporting (financial instruments not measured at fair value).
Due to the prospective application of IFRS 13, information in addition to that required by IFRS 7 is provided without corresponding previous-year values.
The fair value hierarchy reflects characteristics of the pricing information and inputs used for measurement, and it is structured as follows:
- Level 1: Assets and liabilities that are measured using (unadjusted) prices quoted directly on active, liquid markets. This includes, first and foremost, listed equities, futures and options, investment funds and highly liquid bonds traded on regulated markets.
- Level 2: Assets and liabilities that are measured using observable market data and are not allocated to Level 1. Measurement is based in particular on prices for comparable assets and liabilities that are traded on active markets, prices on markets that are not deemed active and inputs derived from such prices and market data. This level includes, for example, assets measured on the basis of yield curves such as debenture bonds and registered debt securities. Also allocated to Level 2 are market prices for bonds with limited liquidity such as corporate securities.
- Level 3: Assets and liabilities that cannot be measured or can be measured only in part using inputs observable on the market. These instruments are mainly measured using measurement models and methods. This level primarily includes unlisted equity instruments.
Allocation to the fair value hierarchy levels is reviewed at a minimum as at the end of a period. Transfers are shown as if they had taken place at the beginning of the financial year.