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26  Fair value measurement and disclosures

 

26.1  Fair value hierarchy

To increase consistency and comparability in fair value measurements and related disclosures, IFRS 13 established a fair value hierarchy that categorizes into three levels the inputs to valuation techniques used to measure their value.

 

Level 1 inputs: Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Group can access at the measurement date.
Level 2 inputs: Inputs other than quoted prices included within level 1 that are observable for the asset or indirectly.
Level 3 inputs: Unobservable inputs for the asset or liability.

 

There have been no transfers between the levels in 2017 and 2018.

 

26.2  Assets and liabilities measured at fair value on a recurring basis after initial recognition

The following table shows the valuation techniques used in the determination of fair values for assets and liabilities measured at fair value on a recurring basis after initial recognition: 

 

Position

Net carrying amount in balance sheet measured at fair value

(CHF 1,000)

Level

Data source

Model

Change in fair value recognized in position

 

31.12.2017

31.12.2018

 

 

 

 

Currency forwards

 (109) 

(3,351)

Level 2 

Bloomberg 

(forward rate – [spot rate +/- forward points]) * amount in foreign currency

Financial result 

Currency options

 – 

112

Level 2 

Bloomberg 

Black-Scholes model

Financial result 

Unquoted equity ­investment

 – 

4,000

Level 3

n/a

Discounted cash flow method

Other comprehensive

income (FVOCI)

Contingent consideration

 (11,639) 

(4,916)

Level 3

n/a

Discounted cash flow method 

See note 3.2

Other operating result 

 

Unquoted equity investment – level 3 inputs: The Group acquired an unquoted equity instrument for CHF 4.0 million in the first half of 2018. The shares have a preferred status in the case of a potential liquidation. Therefore, a decrease in the forecasted cash flows of 10% would not adversely impact the fair value of the investment. Total changes in the fair value recognized during the period in other comprehensive income amount to CHF 0.0 million. No dividend was paid in 2018.

 

Contingent considerations – level 3 inputs: Beside of the WACCs that were used for discounting the expected payments, the underlying business plans are the most significant unobservable inputs. 

 

26.3  Assets and liabilities measured at fair value on a non-recurring basis after initial recognition (IFRS 5)

 

Position

Net carrying amount in balance sheet measured according to IFRS 5 (CHF 1,000)

Fair value less costs to sell
(CHF 1,000)

Level

Data source

Model

Impairment recognized in position

 

31.12.2017

31.12.2018

31.12.2017

31.12.2018

 

 

 

 

Land and 
buildings in 
Hombrechtikon (held for sale)

3'650 

n/a

3'650 

n/a

Level 3 

n/a 

Net rental method See note 3.3

Other operating result 

 

Land and buildings Hombrechtikon – level 3 inputs: Beside of the discount rate, the expected future rental income is the most significant unobservable input. It is based on the highest and best use of the property that differs from the current use due to its change in purpose.

 

26.4  Fair value disclosures for financial instruments measured at amortized cost

The carrying amount of financial instruments measured at amortized costs (see note 25.2) is a reasonable approximation of their fair value due to their short-term nature. Bank loans are the only exception due to their long-term nature. Their fair values are disclosed in the following table.

 

Position

Net carrying amount in balance sheet measured 
at amortized cost
(CHF 1,000)

Fair value disclosure 
(CHF 1,000)

Level

Data source

Model

 

31.12.2017

31.12.2018

31.12.2017

31.12.2018

 

 

 

Bank loans

 (1'229) 

(1,182)

(1,235)

(1,182)

Level 2 

Bloomberg 

The fair value is estimated by discounting the future contractual cash flow s at the current ­market interest rate that is available to the Group for similar financial instruments.

 

26.5  Fair value disclosures for investment property

 

Position

Net carrying amount in balance sheet measured 
at cost less depreciation
(CHF 1,000)

Fair value disclosure 
(CHF 1,000)

Level

Data source

Model

 

31.12.2017

31.12.2018

31.12.2017

31.12.2018

 

 

 

Land and buildings in Hombrechtik on (investment property)

n/a

3,650

n/a

3,650

Level 3 

n/a

Net rental method

See note 3.3

 

Land and buildings Hombrechtikon – level 3 inputs: Beside of the discount rate, the expected future rental income is the most significant unobservable input. It is based on the highest and best use of the property that differs from the current use due to its change in purpose.

The valuation was not prepared by an independent valuer.