Financial Statements - Solvay

Financial instruments
IAS 39 defi nes the categories of fi nancial assets and liabilities. IFRS 7 requires the net carrying amount and the fair value
to be indicated for each category of fi nancial assets and liabilities.
2007 2008
EUR Million
Financial assets at fair value through profi t or loss
– upon initial recognition
Financial assets at fair value through profi t or loss
– held for trading
Net
carrying
amount Fair value
Net
carrying
amount Fair value
0 0 0 0
17 17 80 80
Held-to-maturity investments 0 0 0 0
Loans and receivables (including cash and cash equivalents) 2 466 2 466 2 738 2 738
Available-for-sale fi nancial assets 318 318 30 30
Financial liabilities at fair value through profi t or loss
– upon initial recognition
Financial liabilities at fair value through profi t or loss
– held for trading
Financial liabilities measured at amortized cost
(includes trade liabilities)
0 0 0 0
0 0 -9 -9
-3 291 -3 275 -3 971 -3 847
Where certain expenses are deducted from the proceeds of a borrowing, these are charged over the life of the borrowing.
This is a good approximation to the amortized cost rule, the difference with the linear method not being signifi cant
at Group level.
The category “fi nancial assets at fair value through profi t or loss – held for trading” contains mainly fi nancial instruments,
and in particular “average rate options”, that are used for the Group’s currency risk management, but which are not
documented in a way which allows them to be treated as hedging instruments. This category also includes fi nancial
derivatives at fair value qualifying for hedge accounting (EUR 10 million) with change in fair value recorded in equity.
These operations are detailed in the table below:
EUR Million
2007 2008
Notional
amount Fair value
Notional
amount Fair value
Foreign currency derivatives
Foreign exchange contracts and swaps 414 2 699 22
Options
Interest rate derivatives
306 14 644 58
Swaps 68 1 20 0
Other 0 0 0 0
Other derivatives 0 0 0 0
Total derivative fi nancial instruments 788 17 1 363 80
Financial
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Solvay Global Annual Report 2008
Financial