52
Fair value
(thousands of euros)
2013
Classification
Type
Maturity
Amount
arranged
(thousands
of euros)
Ineffective
portion
recognised in
profit or loss
(thousands
of euros)
Assets
Liabilities
Currency forwards
Foreign currency
hedge
Purchase of
USD
2014
62,520
-
698
3,025
Currency forwards
Foreign currency
hedge
Purchase of
USD
2015
7,313
-
-
189
Currency forwards
Foreign currency
hedge
Purchase of
USD
2016
8,053
-
-
18
Fair value
(thousands of euros)
2012
Classification
Type
Maturity
Amount
arranged
(thousands
of euros)
Ineffective
portion
recognised in
profit or loss
(thousands
of euros)
Assets
Liabilities
Currency forwards
Foreign currency
hedge
Purchase of
USD
2013
60,575
-
1,245
485
Currency forwards
Foreign currency
hedge
Purchase of
USD
2014
8,053
-
-
197
At 31 December 2013, the estimated fair value of the Group's foreign currency derivatives,
which are designated and effective as cash flow hedges, represented a financial asset of EUR
698 thousand and a financial liability of EUR 3,232 thousand (2012: asset of EUR 1,245
thousand and liability of EUR 682 thousand). This amount was deferred and recognised in
equity, taking into account the tax effect.
The valuationmethod consists of estimating the present value of the future cash flows that will
arise under the terms and conditions arranged by the parties for the derivative instrument.
The spot price is taken to be the reference exchange rate of the European Central Bank on 31
December 2013, the swap points (offer/bid) and the interest rates prevailing at the valuation
date.
The foreign currency derivatives have been arranged in such a way that they are totally
effective and, therefore, they are recognised in full in equity until inventories are recognised.
The sensitivity analysis indicates that positive or negative changes of 10% in the spot
EUR/USD exchange rate would give rise to changes of approximately EUR 14million in the fair
value of the foreign currency derivatives in 2013 (2012: EUR 9million). Increases in the value
of the euro (depreciation of the US dollar) would increase negative values while decreases in
the value of the eurowould increase positive values.
Financial instruments measured at fair value must be classified as levels 1 to 3, based on the
degree of verification of their fair value. Therefore, fair values derived from quoted prices on
activemarkets will be classified as level 1. Those derived from external information other than
quoted prices will be classified as level 2. And values obtained using valuation techniques
including data that are not observable in active markets will be classified as level 3. The
Group’s derivative instruments detailed in this section on “Foreign Currency Hedges” would be
classified as level 2.
