Note 34 Valuation of financial assets and liabilities at fair value

Group financial instruments are valued either at accrued acquisition value or fair value depending on how the instrument is classified according to IFRS 9. Items which have been the object of valuation at fair value are unlisted shareholdings, different types of derivatives, unlisted funds and contingent consideration.

Group unlisted shareholdings are valued at fair value. The purchase price is a reasonable approximation of fair value on the balance sheet date. The fair value of the Group’s shares in unlisted funds is based on the valuation received from the managing institute. The valuation belongs to level 3 in the fair value hierarchy. However, the Group does not have access to the information about the input data used by the institute for the valuation and therefore no information about such data is given. The fair value of the Group’s contingent considerations has been calculated as the current value of the amounts expected to be paid out according to the individual contracts. The single largest Group contingent consideration will be paid out if Peab receives a certain permit for quarry operations. The valuation of the consideration is therefore dependent on how Peab judges the probability of receiving said permit. The value of this contingent consideration on the balance sheet date was SEK 22 million (22). Other contingent considerations are based on projects received and profit/loss in the acquired businesses.

When calculating the fair value of interest-bearing receivables and liabilities and interest rate swaps, future cash flows were discounted to the listed market interest for the remaining terms of maturity. Spot rates on the balance sheet date were used to calculate the fair value of currency swaps. The recognized value of non-interest-bearing asset and liability items such as accounts receivable and accounts payable with a remaining maturity of less than six months is believed to reflect the fair value. The tables below show the recognized values compared with the estimated fair value per type of financial asset and liability.

 

Valued at fair value via the income statement Derivatives used in hedge accounting Financial assets available-for-sale 1) Accrued acquisition value 2) Other financial liabilities Total recognized value Fair value
Group, MSEK 2018 2017 2018 2017 2017 2018 2017 2018 2017 2018 2017 2018 2017
Värderade till verkligt värde via resultaträkningen Derivat som används i säkrings-redovisning Finansiella tillgångar som kan säljas 1) Upplupet anskaffningsvärde 2) Övriga finansiella skulder Summa redovisat värde Verkligt värde
Koncernen, Mkr 2018 2017 2018 2017 2017 2018 2017 2018 2017 2018 2017 2018 2017
Financial assets Finansiella tillgångar
Other securities held as fixed assets Andra långfristiga värdepappersinnehav 109 80 109 80 109 80
Interest-bearing long-term receivables Räntebärande långfristiga fordringar 1,445 1,520 1,445 1,520 1,449 1,525
Other long-term receivables Andra långfristiga fordringar 0 2 89 108 89 110 89 110
Accounts receivable Kundfordringar 10,166 8,709 10,166 8,709 10,166 8,709
Interest-bearing current receivables Räntebärande kortfristiga fordringar 640 411 640 411 640 411
Prepaid expenses and accrued income Förutbetalda kostnader och upplupna intäkter 33 28 33 28 33 28
Other current receivables Övriga kortfristiga fordringar 1 4 513 96 514 100 514 100
Liquid funds Likvida medel 1,376 595 1,376 595 1,376 595
Total financial assets Summa finansiella tillgångar 110 4 0 2 80 14,262 11,467 14,372 11,553 14,376 11,558
Financial liabilities Finansiella skulder                            
Interest-bearing long-term liabilities Räntebärande långfristiga skulder 5,194 2,573 5,194 2,573 5,187 2,573
Other long-term liabilities Övriga långfristiga skulder 23 23 22 44 116 136 161 203 161 203
Interest-bearing current liabilities Räntebärande kortfristiga skulder 1,818 1,169 1,818 1,169 1,818 1,169
Accounts payable Leverantörsskulder 5,177 4,882 5,177 4,882 5,177 4,882
Accrued expenses and deferred income Upplupna kostnader och förutbetalda intäkter 4 14 4 14 4 14
Other current liabilities Övriga kortfristiga skulder 12 11 2 91 141 103 154 103 154
Total financial liabilities Summa finansiella skulder 35 34 22 46 12,400 8,915 12,457 8,995 12,450 8,995
Unrecognized profit/loss 3) Oredovisade vinster/förluster 3) 11 5
1) Category valid only until the end of 2017.
2) Financial assets classified 2017 as Accounts and loan receivables.
3) In cases where there is a difference between recognized value and fair value the valuation belongs to level 3 in the fair value hierarchy. 

The effect of valuing financial instruments at fair value was included in the Group’s income statement for a total of SEK -17 million (-1). The effects stem from the market value of the outstanding currency swaps.

Valued at fair value via the income statement Accrued acquisition value 1) Other financial liabilities Total recognized value Fair value
Parent company, MSEK 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Värderade till verkligt värde via resultaträkningen Upplupet anskaffningsvärde 1) Övriga finansiella skulder Summa redovisat värde Verkligt värde
Moderbolaget, Mkr 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017
Financial assets Finansiella tillgångar                    
Other securities held as fixed assets Andra långfristiga värdepappersinnehav 0 0 0
Accounts receivable Kundfordringar 0 1 0 1 0 1
Current receivables Group companies Kortfristiga fordringar koncernföretag 2,736 3,472 2,736 3,472 2,736 3,472
Total financial assets Summa finansiella tillgångar 0 2,736 3,473 2,736 3,473 2,736 3,473
Financial liabilities Finansiella skulder                    
Long-term liabilities Group companies Långfristiga skulder till koncernföretag 3,883 6,326 3,883 6,326 3,883 6,326
Accounts payable Leverantörsskulder 31 25 31 25 31 25
Current liabilities Group companies Kortfristiga skulder till koncernföretag 59 347 59 347 59 347
Total financial liabilities Summa finansiella skulder 3,973 6,698 3,973 6,698 3,973 6,698
1) Financial assets classified 2017 as Accounts and loan receivables.

Fair value

Measurement of fair value is based on a three-level hierarchy.

Level 1: prices that reflect quoted prices on an active market for identical assets
Level 2: based on direct or indirect observable inputs not included in level 1
Level 3: based on inputs unobservable to the market

The table below shows the allocated level of financial assets and financial liabilities recognized as fair value in the Group balance sheet.

    Level 2
Level 3
Total
Group, MSEK
  2018 2017 2018 2017 2018 2017
    Nivå 2 Nivå 3 Summa
Koncernen, Mkr 2018 2017 2018 2017 2018 2017
Financial assets Finansiella tillgångar
Other securities held as fixed assets Andra långfristiga värdepappersinnehav 109 59 109 59
   Whereof shareholding in unlisted company      Varav onoterade aktier 20 20
   Whereof investment in unlisted funds      Varav onoterade fonder 89 59 89 59
Other long-term receivables Andra långfristiga fordringar 2 2
   Whereof commodity hedging with futures      Varav råvarusäkring med termin 2 2
Other current receivables Övriga kortfristiga fordringar 1 4 1 4
   Whereof currency derivatives      Varav valutaderivat 1 4 1 4
Total financial assets Summa finansiella tillgångar 1 6 109 59 110 65
Financial liabilities Finansiella skulder
Other long-term liabilities Övriga långfristiga skulder 22 44 23 23 45 67
   Whereof interest rate swaps      Varav ränteswappar 18 44 18 44
   Whereof commodity hedging with futures      Varav råvarusäkring med termin 4   4
   Whereof contingent consideration      Varav villkorad köpeskilling 23 23 23 23
Other current liabilities Övriga kortfristiga skulder 1 2 11 11 12 13
   Whereof currency derivatives      Varav valutaderivat 1 2 1 2
   Whereof contingent consideration      Varav villkorad köpeskilling 11 11 11 11
Total financial liabilities Summa finansiella skulder 23 46 34 34 57 80

The tables below shows reconciliation between the opening and closing balance for assets and liabilities included in level 3.

    Unlisted shares 1) Unlisted funds
Group, MSEK
  2018 2018 2017
    Onoterade
aktier 1)
Onoterade
fonder
Koncernen, Mkr 2018 2018 2017
Opening balance Ingående balans 21 59 54
Investments during the year Investeringar under året 19 17
Sales during the year Försäljningar under året -12
Repayment during the year Återbetalningar under året -14
Dividends received Erhållen utdelning -3 -1
Reported in profit/loss for the year 2) Redovisat i årets resultat 2) 11 14 -2
Reported in other comprehensive income Redovisat i övrigt totalresultat 5
Closing balance Utgående balans 20 89 59
1) As of 2018 even unlisted shares are valued at fair value.
2) Recognized in net financial items.
    Contingent consideration
Group, MSEK
  2018 2017
    Villkorad köpeskilling
Koncernen, Mkr 2018 2017
Opening balance Ingående balans 34 23
Acquisitions for the year Årets förvärv 2 11
Payments during the year Årets utbetalningar -3
Reported in profit/loss for the year: Redovisat i årets resultat:
   Other operating costs      Övriga rörelsekostnader 1
   Interest expense (discount) 1)      Räntekostnad (diskontering) 1) 0 0
Reported in other comprehensive income Redovisat i övrigt totalresultat 0
Closing balance Utgående balans 34 34
1) Recognized in net financial items.

The contingent consideration will amount to at least SEK 3 million and at most SEK 40 million.