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40. Carrying amounts and fair values according to measurement categories

The carrying amounts and fair values of recognised financial instruments are as follows:

 

30/9/2021

 

 

Balance sheet value

 

€ million

Carrying amount

(Amortised) cost

Fair value through profit or loss

Fair value recognised in equity without reclassification

Fair value recognised in equity with reclassification

Fair value

Assets

12,819

n/a

n/a

n/a

n/a

n/a

Financial instruments measured at amortised cost

964

964

0

0

0

965

Loans and advance credit granted

24

24

0

0

0

26

Receivables due from suppliers

232

232

0

0

0

232

Trade receivables

496

496

0

0

0

496

Miscellaneous financial instruments

212

212

0

0

0

212

Financial instruments measured at fair value through profit or loss

84

0

84

0

0

84

Investments

59

0

59

0

0

59

Derivative financial instruments not in a hedging relationship according to IAS 39

15

0

15

0

0

15

Securities

3

0

3

0

0

3

Loans and advance credit granted

4

0

4

0

0

4

Miscellaneous financial instruments

2

0

2

0

0

2

Financial instruments measured at fair value through other comprehensive income

3

0

0

3

0

3

Investments

3

0

0

3

0

3

Derivative financial instruments in a hedging relationship according to IAS 39

8

n/a

n/a

n/a

n/a

8

Cash and cash equivalents

1,474

1,474

0

0

0

1,474

Receivables from leases (amount according to IFRS 16)

178

n/a

n/a

n/a

n/a

179

Assets not classified according to IFRS 7

10,108

n/a

n/a

n/a

n/a

n/a

Equity and liabilities

12,819

n/a

n/a

n/a

n/a

n/a

Financial instruments measured at fair value through profit or loss

8

0

8

0

0

8

Derivative financial instruments not in a hedging relationship according to IAS 39

8

0

8

0

0

8

Financial instruments measured at amortised cost

6,242

6,242

0

0

0

6,275

Borrowings excl. liabilities from leases (incl. hedged items in hedging relationships according to IAS 39)

1,973

1,973

0

0

0

2,004

Trade liabilities

3,476

3,476

0

0

0

3,476

Miscellaneous financial liabilities

793

793

0

0

0

794

Derivative financial instruments in a hedging relationship according to IAS 39

0

n/a

n/a

n/a

n/a

0

Liabilities from leases (amount according to IFRS 16)

2,981

n/a

n/a

n/a

n/a

n/a

Equity and liabilities not classified according to IFRS 7

3,588

n/a

n/a

n/a

n/a

n/a

 

30/9/2022

 

 

Balance sheet value

 

€ million

Carrying amount

(Amortised) costs

Fair value profit or loss

Fair value recognised in equity without reclassification

Fair value recognised in equity with reclassification

Fair value

Assets

12,855

n/a

n/a

n/a

n/a

n/a

Financial instruments measured at amortised cost

1,046

1,046

0

0

0

1,047

Loans and advance credit granted

24

24

0

0

0

25

Receivables due from suppliers

253

253

0

0

0

253

Trade receivables

601

601

0

0

0

601

Miscellaneous financial instruments

168

168

0

0

0

168

Financial instruments measured at fair value through profit or loss

178

0

178

0

0

178

Investments

52

0

52

0

0

52

Derivative financial instruments not in a hedging relationship according to IAS 39

3

0

3

0

0

3

Securities

3

0

3

0

0

3

Loans and advance credit granted

5

0

5

0

0

5

Miscellaneous financial instruments

114

0

114

0

0

114

Financial instruments measured at fair value through other comprehensive income

2

0

0

2

0

2

Investments

2

0

0

2

0

2

Derivative financial instruments in a hedging relationship according to IAS 39

12

n/a

n/a

n/a

n/a

12

Cash and cash equivalents

825

825

0

0

0

825

Receivables from leases (amount according to IFRS 16)

138

n/a

n/a

n/a

n/a

140

Assets not classified according to IFRS 7

10,653

n/a

n/a

n/a

n/a

n/a

Equity and liabilities

12,855

n/a

n/a

n/a

n/a

n/a

Financial instruments measured at fair value through profit or loss

17

0

17

0

0

17

Derivative financial instruments not in a hedging relationship according to IAS 39

16

0

16

0

0

16

Miscellaneous financial liabilities

1

0

1

0

0

1

Financial instruments measured at amortised cost

6,051

6,051

0

0

0

6,020

Borrowings excl. liabilities from leases (incl. hedged items in hedging relationships according to IAS 39)

1,277

1,277

0

0

0

1,247

Trade liabilities

3,855

3,855

0

0

0

3,855

Miscellaneous financial liabilities

918

918

0

0

0

917

Derivative financial instruments in a hedging relationship according to IAS 39

1

n/a

n/a

n/a

n/a

1

Liabilities from leases (amount according to IFRS 16)

2,847

n/a

n/a

n/a

n/a

n/a

Equity and liabilities not classified according to IFRS 7

3,940

n/a

n/a

n/a

n/a

n/a

Classes were formed based on similar risks for the respective financial instruments and correspond to the categories of IFRS 9. Derivative financial instruments with a hedging relationship according to IAS 39 and other financial liabilities are each assigned to a separate class.

The fair value hierarchy comprises 3 levels which reflect the degree of closeness to the market of the input parameters used in the determination of the fair values. In cases in which the measurement is based on different input parameters, the fair value is attributed to the hierarchy level corresponding to the input parameter of the lowest level that is significant for the valuation.

Level 1 input parameters: quoted prices (that are adopted unchanged) in active markets for identical assets or liabilities which the company can access at the valuation date.

Level 2 input parameters: other input parameters than the quoted prices assigned to level 1 which are either directly or indirectly observable for the asset or liability.

Level 3 input parameters: unobservable inputs for the asset or liability.

Of the total carrying amount of investments of €54 million (30/9/2021: €63 million), €52 million (30/9/2021: €59 million) is measured at fair value through profit or loss. These are unlisted financial instruments for which no active market exists either. The remaining investments totalling €2 million (30/9/2021: €3 million) are measured at fair value recognised in equity. The classification (FVOCInR) was chosen because investment was made in these equity instruments with a longer-term investment horizon.

In addition, securities totalling €3 million (30/9/2021: €3 million) are recognised through profit or loss. These primarily concern highly liquid exchange-listed money market funds.

The other financial instrument of €114 million relates to the put option in connection with the intended disposal of the shares in WM Holding (HK) Limited.

The following table depicts the financial instruments that are recognised at fair value in the balance sheet. These are classified into the 3-level fair value hierarchy whose levels reflect the degree of closeness to the market of the data used in the determination of the fair values:

 

30/9/2021

30/9/2022

€ million

Total

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Assets

95

0

93

2

192

0

78

114

Financial assets measured at fair value through profit or loss

 

 

 

 

 

 

 

 

Investments

59

0

59

0

52

0

52

0

Loans and advance credit granted

4

0

4

0

5

0

5

0

Securities

3

0

3

0

3

0

3

0

Miscellaneous financial instruments

2

0

0

2

114

0

0

114

Derivative financial instruments not in a hedging relationship according to IFRS 9

15

0

15

0

3

0

3

0

Derivative financial instruments in a hedging relationship according to IAS 39

8

0

8

0

12

0

12

0

Financial assets measured at fair value through other comprehensive income

 

 

 

 

 

 

 

 

Investments

3

0

3

0

2

0

2

0

Equity and liabilities

8

0

8

0

18

0

17

1

Financial liabilities measured at fair value through profit or loss

 

 

 

 

 

 

 

 

Derivative financial instruments not in a hedging relationship according to IFRS 9

8

0

8

0

16

0

16

0

Miscellaneous financial liabilities

0

0

0

0

1

0

0

1

Derivative financial instruments in a hedging relationship according to IAS 39

0

0

0

0

1

0

1

0

 

87

0

85

2

174

0

61

113

The measurement of securities (level 1) is carried out based on quoted market prices in active markets.

Interest rate swaps and currency transactions (all level 2) are measured using the mark-to-market valuation method based on quoted exchange rates and market yield curves.

The measurement of investments (all level 2) is based on comparable transactions in the past.

No transfers between levels 1 and 2 were effected during the reporting period.

Financial instruments that are recognised at amortised cost in the balance sheet, but for which the fair value is stated in the notes, are also classified according to a 3-level fair value hierarchy.

Due to their mostly short terms, the fair values of receivables due from suppliers, trade receivables and liabilities as well as cash and cash equivalents essentially correspond to their carrying amounts.

The measurement of the fair value of bonds, liabilities to banks and promissory note loans is based on the market interest rate curve following the discounted cash flow method in consideration of credit spreads (level 2). The amounts comprise the interest prorated to the closing date.

The fair values of all other financial assets and liabilities (level 2) that are not listed on an exchange correspond to the present value of payments underlying these balance sheet items. The calculation was based on the applicable country-specific yield curve (level 2) as of the closing date.

METRO has exercised a put option for the shares in WM Holding (HK) Limited, which is not yet settled. The shares are accounted for as an asset held for sale. The effect of discounting and credit risk on the valuation of the put option is considered immaterial due to the short maturity and implicit collateralisation. Since the value of the shares cannot be derived from observable markets, but is determined by an expert using a discounted cash flow method, it is officially a Level 3 instrument. The sales price is fixed through the minimum purchase price, so that the value of the shares and the value of the put option together represent the purchase price. Therefore, the value of the put option compensates for any changes in the value of the shares: if the value of the shares increases (decreases) by €10 million, for example, the value of the put option decreases (increases) by a comparable amount. From the year-end valuation, an income of €114 million was realised in the financial result from the valuation of the put option, while an expense of the same amount was recognised from the impairment of the investment.

Fair value
Recognised fair value that would be received in return for the disposal of an asset or paid for the assignment of a debt in an ordinary transaction conducted between market participants on the assessment date.
Glossary
IFRS (International Financial Reporting Standards)
Internationally applicable rules for financial reporting developed by the IASB.
Glossary
Mark-to-market valuation
Calculation of the fair value of financial instruments on the basis of market prices at a particular assessment date.
Glossary

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