TVO 2018

15 Book values of financial assets and liabilities by categories

2018 EUR 1 000	Fair value through profit or loss	At fair value through other comprehensive income items	Amortised cost	Book value total	Fair value total	Note
Non-current assets
Loans and other receivables			669 295	669 295	669 295	16
Share investments		1 934		1 934	1 934	17
Derivative financial instruments, no hedge accounting	8 673			8 673	8 673	20
Derivative financial instruments, cash flow hedge accounting		10 744		10 744	10 744	20
Derivative financial instruments, fair value hedge accounting	12 582			12 582	12 582	20
Current assets
Trade and other receivables			149 640	149 640	149 640	16
Derivative financial instruments, no hedge accounting	307			307	307	20
Derivative financial instruments, cash flow hedge accounting		4 498		4 498	4 498	20
Derivative financial instruments, fair value hedge accounting	435			435	435	20
Fund holdings				0	0	17
Total by category	21 997	17 176	818 935	858 108	858 108
Non-current liabilities
Loan from the Finnish State Nuclear Waste Management Fund			666 242	666 242	666 242	22
Other financial liabilities			3 650 497	3 650 497	3 735 829	22
Derivative financial instruments, no hedge accounting	18 142			18 142	18 142	20
Derivative financial instruments, cash flow hedge accounting		11 870		11 870	11 870	20
Derivative financial instruments, fair value hedge accounting
Current liabilities
Current financial liabilities			459 513	459 513	459 513	22
Trade payables			7 184	7 184	7 184	23
Other current liabilities			130 301	130 301	130 301	23
Derivative financial instruments, no hedge accounting	73			73	73	20
Derivative financial instruments, cash flow hedge accounting		872		872	872	20
Derivative financial instruments, fair value hedge accounting
Total by category	18 215	12 743	4 913 737	4 944 695	5 030 026

2017 EUR 1 000	Fair value through profit or loss	At fair value through other comprehensive income items	Amortised cost	Book value total	Fair value total	Note
Non-current assets
Loans and other receivables			658 678	658 678	658 678	16
Share investments		1 934		1 934	1 934	17
Derivative financial instruments, no hedge accounting	7 497			7 497	7 497	20
Derivative financial instruments, cash flow hedge accounting		8 639		8 639	8 639	20
Derivative financial instruments, fair value hedge accounting	19 155			19 155	19 155	20
Current assets
Trade and other receivables			21 294	21 294	21 294	16
Derivative financial instruments, no hedge accounting	10 894			10 894	10 894	20
Derivative financial instruments, cash flow hedge accounting		3 775		3 775	3 775	20
Derivative financial instruments, fair value hedge accounting
Fund units
Total by category	37 546	14 348	679 972	731 867	731 867
Non-current liabilities
Loan from the Finnish State Nuclear Waste Management Fund			655 518	655 518	655 518	22
Other financial liabilities			3 469 831	3 469 831	3 581 560	22
Derivative financial instruments, no hedge accounting	10 093			10 093	10 093	20
Derivative financial instruments, cash flow hedge accounting		12 703		12 703	12 703	20
Derivative financial instruments, fair value hedge accounting	1 565			1 565	1 565	20
Current liabilities
Current financial liabilities			392 539	392 539	392 539	22
Trade payables			6 160	6 160	6 160	23
Other current liabilities			129 191	129 191	129 191	23
Derivative financial instruments, no hedge accounting	31 236			31 236	31 236	20
Derivative financial instruments, cash flow hedge accounting		4 698		4 698	4 698	20
Derivative financial instruments, fair value hedge accounting
Total by category	42 893	17 401	4 653 239	4 713 533	4 825 262

Fair values of long-term loans, have been estimated as follows:

The fair value of quoted bonds is based on the quoted market value as of 31 December (Level 1). The fair value of fixed rate and market-based floating rate loans is estimated using the expected future payments discounted at market interest rates (Level 2).

The carrying amounts of current financial assets and liabilities approximate their fair value, as the impact of discounting is not significant.

Disclosure of fair value measurements by the level of fair value measurement hierarchy

2018 EUR 1 000	Level 1	Level 2	Level 3
Financial assets at fair value
Derivative financial instruments, no hedge accounting		8 981
Derivative financial instruments designated as cash flow hedges		15 242
Derivative financial instruments designated as fair value hedges		13 016
Fund units
Share investments			1 934
Total	0	37 239	1 934
Financial liabilities at fair value
Derivative financial instruments at fair value through profit or loss		18 215
Derivative financial instruments designated as cash flow hedges		12 743
Derivative financial instruments designated as fair value hedges		0
Total	0	30 958	0

2017 EUR 1 000	Level 1	Level 2	Level 3
Financial assets at fair value
Derivative financial instruments, no hedge accounting		18 391
Derivative financial instruments designated as cash flow hedges		12 414
Derivative financial instruments designated as fair value hedges		19 155
Fund units
Share investments			1 934
Total	0	49 961	1 934
Financial liabilities at fair value
Derivative financial instruments at fair value through profit or loss		41 329
Derivative financial instruments designated as cash flow hedges		17 401
Derivative financial instruments designated as fair value hedges		1 565
Total	0	60 294	0

Fair value estimation

The derivative financial instruments are initially recognized at fair value on the date a derivative contract is entered into and are subsequently measured at fair value. The fair values are determined using a variety of methods and financial valuation techniques, and assumptions are based on market quotations at the balance sheet date (Level 2). The fair value of the interest rate swaps is the present value of the estimated future cash flows.

The forward contracts are measured using the market quotes at the closing date. The fair value of the interest rate options is calculated using market quotes at the closing date and by using the Black and Scholes option valuation model. The changes in fair value of the interest rate swaps and forward contracts are recognized in equity or profit or loss, depending on whether they qualify for cash flow hedges or not. The changes in fair value of interest rate options that do not qualify for hedge accounting are presented in the income statement.

On 31 December 2018, TVO has unquoted shares worth EUR 1,934 (2017:1,934) thousand. Direct market prices are not available for unquoted shares and therefore their fair value is determined using methods based on management judgement.

Offsetting financial assets and liabilities

2018 EUR 1 000	Gross amounts	Related amounts not set off	Net amount
Derivative financial assets	37 239	14 375	51 614
Derivative financial liabilities	-30 958	-14 375	-45 333
2017 EUR 1 000	Gross amounts	Related amounts not set off	Net amount
Derivative financial assets	49 961	-25 757	24 204
Derivative financial liabilities	-60 294	25 757	-34 538

For the financial derivative assets and liabilities subject to enforceable master netting arrangements or similar arrangements above, each agreement between the Group and the counterparty allows for net settlement of the relevant financial derivative assets and liabilities when both elect to settle on a net basis. In the absence of such an election, financial assets and liabilities will be settled on a gross basis, however, each party to the master netting agreement or similar agreement will have the option to settle all such amounts on a net basis in the event of default of the other party. Per the terms of each agreement, an event of default includes failure by a party to make payment when due.

15 Book values of financial assets and liabilities by categories

Fair values of long-term loans, have been estimated as follows:

Disclosure of fair value measurements by the level of fair value measurement hierarchy

Fair value estimation

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