10 Financial instruments and fair value disclosures
10.1 Classes of financial instruments
| Cash and cash equivalents | Current derivatives | Trade and other receivables | Non- | Total assets 2018 | Current financial liabilities | Trade and other payables/accrued expenses | Non- | Total liabilities 2018 |
CHF 1,000 |
|
|
|
|
|
|
|
|
|
Financial instruments measured at fair value |
|
|
|
|
|
|
|
|
|
Currency forwards and options | – | 977 | – | 90 | 1,067 | (3,900) | – | (406) | (4,306) |
Contingent consideration | – | – | – | – | – | (4,916) | – | – | (4,916) |
|
|
|
|
|
|
|
|
|
|
Financial instruments measured at fair value |
|
|
|
|
|
|
|
|
|
Unquoted equity investment | – | – | – | 4,000 | 4,000 | – | – | – | – |
|
|
|
|
|
|
|
|
|
|
Financial instruments measured at amortized costs1 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents | 296,845 | – | – | – | 296,845 | – | – | – | – |
Receivables | – | – | 105,811 | – | 105,811 | – | – | – | – |
Rent and other deposits | – | – | 473 | 1,015 | 1,488 | – | – | – | – |
Current bank liabilities | – | – | – | – | – | (1,129) | – | – | (1,129) |
Bank loans | – | – | – | – | – | – | – | (1,182) | (1,182) |
Payables and accrued expenses | – | – | – | – | – | – | (66,700) | – | (66,700) |
|
|
|
|
|
|
|
|
|
|
Total financial instruments | 296,845 | 977 | 106,284 | 5,105 | 409,211 | (9,945) | (66,700) | (1,588) | (78,233) |
|
|
|
|
|
|
|
|
|
|
Reconciling items2 | – | – | 12,463 | – | 12,463 | – | (14,648) | – | (14,648) |
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2018 | 296,845 | 977 | 118,747 | 5,105 | 421,674 | (9,945) | (81,348) | (1,588) | (92,881) |
- The carrying amount of financial instruments measured at amortized costs 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 (fair value of TCHF 1,182).
- Receivables/payables arising from VAT/other non-income taxes and social security.
| Cash and cash equivalents | Current derivatives | Trade and other receivables | Non- | Total assets 2019 | Current financial liabilities | Trade and other payables/accrued expenses | Non- | Total liabilities 2019 |
CHF 1,000 |
|
|
|
|
|
|
|
|
|
Financial instruments measured at fair value |
|
|
|
|
|
|
|
|
|
Currency forwards and options | – | 768 | – | 12 | 780 | (3,697) | – | (6) | (3,703) |
|
|
|
|
|
|
|
|
|
|
Financial instruments measured at fair value |
|
|
|
|
|
|
|
|
|
Unquoted equity investment | – | – | – | 3,000 | 3,000 | – | – | – | – |
|
|
|
|
|
|
|
|
|
|
Financial instruments measured at amortized costs1 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents | 269,701 | – | – | – | 269,701 | – | – | – | – |
Receivables | – | – | 101,417 | - | 101,417 | – | – | – | – |
Rent and other deposits | – | – | 795 | 1,038 | 1,833 | – | – | – | – |
Current bank liabilities | – | – | – | – | – | (3,426) | – | – | (3,426) |
Bank loans | – | – | – | – | – | (1,461) | – | (267) | (1,728) |
Payables and accrued expenses | – | – | – | – | – | – | (51,271) | – | (51,271) |
|
|
|
|
|
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
Lease liabilities | – | – | – | – | – | (9,732) | – | (37,158) | (46,890) |
|
|
|
|
|
|
|
|
|
|
Total financial instruments | 269,701 | 768 | 102,212 | 4,050 | 376,731 | (18,316) | (51,271) | (37,431) | (107,018) |
|
|
|
|
|
|
|
|
|
|
Reconciling items2 | – | – | 14,452 | – | 14,452 | – | (20,041) | – | (20,041) |
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2019 | 269,701 | 768 | 116,664 | 4,050 | 391,183 | (18,316) | (71,312) | (37,431) | (127,059) |
- The carrying amount of financial instruments measured at amortized costs 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 (fair value of TCHF 1,716).
- Receivables/payables arising from VAT/other non-income taxes and social security.
10.2 Fair value hierarchy (level) and valuation techniques used
Position | Level | Data source | Model |
Currency forwards | Level 2 | Bloomberg | (Forward rate - [spot rate +/- forward points]) * amount in foreign currency |
Currency options | Level 2 | Bloomberg | Black-Scholes model |
Bank loans | Level 2 | Bloomberg | The fair value is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. |
Unquoted equity investment | Level 3 | n/a | Discounted cash flow model (see note 10.3) |
Contingent considerations | Level 3 | n/a | Discounted cash flow model (see note 10.4) |
There have been no transfers between the levels in 2018 and 2019.
10.3 Unquoted equity investment (level 3)
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. Total changes in fair value recognized during the period in other comprehensive income amount to CHF 1.0 million. A further decrease in the forecasted cash flows of 10% would adversely impact the fair value by estimated CHF 1.0 million.
10.4 Contingent considerations (level 3)
| 2018 | 2019 |
CHF 1,000 |
|
|
Balance at January 1 | 11,639 | 4,916 |
|
|
|
Cash flows |
|
|
Settlement | (4,836) | (5,000) |
|
|
|
Non-cash changes |
|
|
Change in fair value recognized in 'other operating expenses' | 210 | – |
Translation differences | 17 | 84 |
|
|
|
Balance at June 30 | 7,030 | 0 |
Follow Tecan