Nabaltec_E_GB2016

OTHER DISCLOSURES 97 The subsequent measurement of derivative financial instruments in the “held for trading” measurement category incorporates interest effects. These effects are recognized under inter- est and similar income and expenses. On the other hand, effects from the subsequent meas- urement of interest rate derivatives which are designated as effective cash flow hedges are recognized under shareholders’ equity with no effect on profit and loss. The recognition of ineffective hedges with an effect on profit and loss was not necessary. Currency translation income and expenses for financial assets in the “acquisition costs,” “loan and receivables” and “other liabilities” measurement categories result from shares in companies which are not fully consolidated, trade payables and receivables and accounts payable to banks which are denominated in foreign currency. They are recognized under “other operating income” and “other operating expenses.” Impairments largely consist of transfers to and reversals of individual allowances on trade receivables. These amounts are recognized under “other operating income” and “other operating expenses.” Fair value hierarchy On 1 January 2009, a hierarchy of various fair values was introduced for financial assets and liabilities measured at fair value with effect on profit and loss specifying the significance of the input data used for measurement. This hierarchy is as follows: Level 1: At the first level of the fair value hierarchy, fair value is determined based on publicly quoted market prices, since the best possible objective indication of the fair value of a financial asset or liability can be observed in an active market. Level 2: If an active market does not exist for a financial instrument, companies determine fair value using valuation models. Valuation models include use of the discounted cash flow meth- od, option price models, comparing the instrument to the present fair value of another, largely identical, financial instrument, and examining recent transactions between well-informed, independent and willing business partners. Fair value is estimated based on the results of a valuation method which uses market data to the greatest possible extent, and is based as little as possible on company-specific data. Level 3: The valuation models used on this level are, in part, not based on parameters and assumptions which are observable in the market. The financial instruments which are measured by the Group at fair value have been assigned to the following levels of the hierarchy: 12/31/2016 in TEUR Assets Level 1 Level 2 Level 3 Total Positive market values of currency derivatives Liabilities Negative market values of interest rate derivatives Negative market values of currency derivatives 0 0 0 0 3,130 175 0 0 0 0 3,130 175 Annual Report 2016 | Nabaltec AG |||| S T N E M E T A T S L A I C N A N I F D E T A D I L O S N O C

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