62
Derivatives classified as financial instruments
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contracts, all measured at fair value. The fair value of the derivative financial instruments is measured using valuation methods
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The Group’s financial assets and liabilities measured at fair value
As at December 31, 2017
Assets and liabilities
measured at fair
value through the
income statement
Derivatives held for
hedging purposes
Derivatives
measured at fair
value through equity
SEK million
Carrying
amount
Valuation
level
Carrying
amount
Valuation
level
Carrying
amount
Valuation
level Total
Sales and purchase contracts 380 2 380
Currency hedge contracts 122 2 122
Fair value of changes in inventories 54 2 54
Total assets - 556 - 556
Sales and purchase contracts 238 2 238
Currency hedge contracts 147 2 147
Fair value of changes in inventories 41 2 41
Total liabilities - 426 - 426
As at December 31, 2016
Assets and liabilities
measured at fair
value through the
income statement
Derivatives held for
hedging purposes
Derivatives
measured at fair
value through equity
SEK million
Carrying
amount
Valuation
level
Carrying
amount
Valuation
level
Carrying
amount
Valuation
level Total
Sales and purchase contracts 246 2 246
Currency hedge contracts 223 2 223
Fair value of changes in inventories 246 2 246
Total assets - 715 - 715
Sales and purchase contracts 525 2 525
Currency hedge contracts 198 2 198
Fair value of changes in inventories 1 2 1
Total liabilities - 724 - 724
Foreign currency contracts and the foreign currency components in sales and purchase contracts are valued at actual market
foreign currency forward rates. The raw material price components in sales and purchase contracts are valued at actual market
forward prices for identical or similar raw materials. Inventory is valued at actual market spot prices for identical or similar raw
materials. Interest rate swap contracts are valued at actual market interest rates.
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Inventory hedging at fair value
Future contracts, and purchase and sales contracts not deemed to be assets for own use are used for hedging, which means that
they cannot be exempted from derivative accounting. Since the quality of the underlying raw materials used for hedging differs
from the quality of the hedged raw materials, some inefficiency is likely. AAK minimizes this inefficiency by reducing the basis risk
between hedged raw material risks and the underlying raw materials used as hedging contracts. Due to the basis risk involved,
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was 86 percent (100).
Fair-value hedge of currency risk on sales contracts qualifying for exemption under assets for own use
The hedging instruments used are future contracts and purchase contracts. As the currency risk of the hedge instruments is
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method to test the hedge efficiency of currency risk on sales contracts that qualify for own use exemption and that may consequently
be exempted from derivative accounting. The hedge efficiency testing in 2017 confirmed a perfect critical match.