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, shares in tenant-owner associations, 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. Shares in tenant-owned housing associations are valued at fair value according to the market prices of similar homes in the same size and the same geographic area. 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 amount expected to be paid according to each respective contract. At the end of 2019 Group contingent considerations were SEK 1 million (34). The largest single Group contingent consideration at the end of 2018 referred to a certain permit for quarry operations and amounted to SEK 22 million.

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 rate 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 Accrued acquisition value Other financial liabilities Total recognized value Fair value
Group, MSEK 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Värderade till verkligt värde via resultaträkningen Derivat som används i säkrings-redovisning Upplupet anskaffningsvärde Övriga finansiella skulder Summa redovisat värde Verkligt värde
Koncernen, Mkr 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Financial assets Finansiella tillgångar
Other securities held as fixed assets Andra långfristiga värdepappersinnehav 77 109 77 109 77 109
Interest-bearing long-term receivables Räntebärande långfristiga fordringar 1,086 1,445 1,086 1,445 1,089 1,449
Other long-term receivables Andra långfristiga fordringar 0 10 89 10 89 10 89
Accounts receivable Kundfordringar 9,285 10,166 9,285 10,166 9,285 10,166
Interest-bearing current receivables Räntebärande kortfristiga fordringar 144 640 144 640 144 640
Prepaid expenses and accrued income Förutbetalda kostnader och upplupna intäkter 9 33 9 33 9 33
Other current receivables Övriga kortfristiga fordringar 0 1 229 513 229 514 229 514
Other securities held as current assets Andra kortfristiga värdepappersinnehav 388 0 388 0 388 0
Liquid funds Likvida medel 373 1,376 373 1,376 373 1,376
Total financial assets Summa finansiella tillgångar 465 110 0 11,136 14,262 – – 11,601 14,372 11,604 14,376
Financial liabilities Finansiella skulder            
Interest-bearing long-term liabilities Räntebärande långfristiga skulder 5,617 5,194 5,617 5,194 5,617 5,187
Other long-term liabilities Övriga långfristiga skulder 0 23 13 22 59 116 72 161 72 161
Interest-bearing current liabilities Räntebärande kortfristiga skulder 3,493 1,818 3,493 1,818 3,493 1,818
Accounts payable Leverantörsskulder 4,295 5,177 4,295 5,177 4,295 5,177
Accrued expenses and deferred income Upplupna kostnader och förutbetalda intäkter 10 4 10 4 10 4
Other current liabilities Övriga kortfristiga skulder 4 12 258 91 262 103 262 103
Total financial liabilities Summa finansiella skulder 4 35 13 22 – – 13,732 12,400 13,749 12,457 13,749 12,450
Unrecognized profit/loss 1) Oredovisade vinster/förluster 1) 3 11
1) In all 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 -4 million (-17). The effects of valuing unlisted shares and funds including received dividends amounted to SEK 16 million (25).

Valued at fair value via the income statement Accrued acquisition value Other financial liabilities Total recognized value Fair value
Parent company, MSEK 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Värderade till verkligt värde via resultaträkningen Upplupet anskaffningsvärde Övriga finansiella skulder Summa redovisat värde Verkligt värde
Moderbolaget, Mkr 2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Financial assets Finansiella tillgångar          
Other securities held as fixed assets Andra långfristiga värdepappersinnehav 0 0 0 0 0 0
Accounts receivable Kundfordringar 1 0 1 0 1 0
Current receivables Group companies Kortfristiga fordringar koncernföretag 2,479 2,736 2,479 2,736 2,479 2,736
Total financial assets Summa finansiella tillgångar 0 0 2,480 2,736 – – 2,480 2,736 2,480 2,736
Financial liabilities Finansiella skulder          
Long-term liabilities Group companies Långfristiga skulder till koncernföretag 2,791 3,883 2,791 3,883 2,791 3,883
Accounts payable Leverantörsskulder 32 31 32 31 32 31
Current liabilities Group companies Kortfristiga skulder till koncernföretag 404 59 404 59 404 59
Total financial liabilities Summa finansiella skulder – – – – 3,227 3,973 3,227 3,973 3,227 3,973

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 at fair value in the Group balance sheet.

    Level 2
 Level 3
 Total
Group, MSEK
   2019 2018 2019 2018 2019 2018
    Nivå 2 Nivå 3 Summa
Koncernen, Mkr 2019 2018 2019 2018 2019 2018
Financial assets Finansiella tillgångar
Other securities held as fixed assets Andra långfristiga värdepappersinnehav 77 109 77 109
   Whereof shareholding in unlisted company      Varav onoterade aktier 19 20 19 20
   Whereof investment in unlisted funds      Varav onoterade fonder 58 89 58 89
Other current receivables Övriga kortfristiga fordringar 1 – 1
   Whereof currency derivatives      Varav valutaderivat 1 – 1
Other securities held as current assets Andra kortfristiga värdepappersinnehav 388 0 388 0
   Whereof repurchased shares in tenant-owner associations      Varav återköpta andelar i bostadsrättsföreningar 388 0 388 0
Total financial assets Summa finansiella tillgångar 1 465 109 465 110
Financial liabilities Finansiella skulder
Other long-term liabilities Övriga långfristiga skulder 13 22 23 13 45
   Whereof interest rate swaps      Varav ränteswappar 13 18 13 18
   Whereof commodity hedging with futures      Varav råvarusäkring med termin 4 – 4
   Whereof contingent consideration      Varav villkorad köpeskilling 23 – 23
Other current liabilities Övriga kortfristiga skulder 3 1 1 11 4 12
   Whereof currency derivatives      Varav valutaderivat 2 1 2 1
   Whereof commodity hedging with futures      Varav råvarusäkring med termin 1   1  –
   Whereof contingent consideration      Varav villkorad köpeskilling 1 11 1 11
Total financial liabilities Summa finansiella skulder 16 23 1 34 17 57

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

Group Other securities held as fixed assets Other securities held as current assets
Unlisted funds Unlisted shares Repurchased shares in tenant-owner associations
MSEK Dec 31 2019 Dec 31 2018 Dec 31 2019 Dec 31 2018 Dec 31 2019
Koncernen Andra långfristiga värdepappersinnehav Andra kortfristiga värdepappersinnehav
Onoterade fonder Onoterade aktier Återköpta andelar i bostadsrättsföreningar
Mkr 31 dec 2019 31 dec 2018 31 dec 2019 31 dec 2018 31 dec 2019
Opening balance Ingående balans 89 59 20 21 0
Investments Investeringar 9 19 1,975
Sales Försäljningar -1 -12 -1,142
Dividends received Erhållen utdelning -55 -3
Reported in profit/loss for the period Redovisat i periodens resultat
      Production costs 1)       Kostnader för produktion 1) -445
      Net finance       Finansnetto 15 14 11
Reported in other comprehensive income Redovisat i övrigt totalresultat 0
Closing balance Utgående balans 58 89 19 20 388

 

1) Have corresponded to project provisions of SEK 391 million and therefore the net effect in the income statement is SEK -54 million.
    Contingent consideration
Group, MSEK
   2019 2018
    Villkorad köpeskilling
Koncernen, Mkr 2019 2018
Opening balance Ingående balans 34 34
Acquisitions for the year Årets förvärv – 2
Payments during the year Årets utbetalningar -31 -3
Reported in profit/loss for the year: Redovisat i årets resultat:
   Other operating costs (+) / other operating income (-)      Övriga rörelsekostnader (+) / övriga rörelseintäkter (-) -3 1
   Interest expense (discount) 1)      Räntekostnad (diskontering) 1) 1 0
Reported in other comprehensive income Redovisat i övrigt totalresultat 0 0
Closing balance Utgående balans 1 34

 

1) Recognized in net financial items.

The contingent considerations will be from SEK 0 million to maximum SEK 1 million.