30 Financial risk management and financial instruments continued
Ahold
Annual Report 2011
Groupata glance
Performance
Governance
Notes to the consolidated financial statements continued
Investors
Financial instruments
Fair values of financial instruments
The following table presents the fair values of financial instruments, based on Ahold's categories of financial instruments, including current
portions, compared to the carrying amounts at which these instruments are included on the balance sheet:
January 1, 2012
January 2, 2011
Carrying
Fair
Carrying
Fair
million
amount
value
amount
value
Loans receivable
36
51
99
111
Accounts receivable
770
770
710
710
Reinsurance assets
103
103
77
77
Total loans and receivables
909
924
886
898
Cash and cash equivalents
2,438
2,438
2,600
2,600
Short-term deposits held to maturity
154
154
224
224
Derivatives
381
381
348
348
Available for sale
3
3
3
3
Total financial assets
3,885
3,900
4,061
4,073
Notes
(1,509)
(1,767)
(1,459)
(1,676)
Other loans
(3)
(3)
(2)
(2)
Financing obligations
(399)
(545)
(400)
(520)
Mortgages payable
(7)
(8)
(9)
(10)
Finance lease liabilities
(1,225)
(1,683)
(1,155)
(1,515)
Cumulative preferred financing shares
(497)
(544)
(497)
(500)
Dividend cumulative preferred financing shares
(24)
(24)
(30)
(30)
Accounts payable
(2,436)
(2,436)
(2,323)
(2,323)
Short-term borrowings
(41)
(41)
(39)
(39)
Interest payable
(45)
(45)
(44)
(44)
Reinsurance liabilities
(108)
(108)
(83)
(82)
Other
(3)
(3)
(2)
(2)
Total financial liabilities at amortized cost
Derivatives
(6,297)
(90)
(7,207)
(90)
(6,043)
(73)
(6,743)
(73)
Total financial liabilities
(6,387)
(7,297)
(6,116)
(6,816)
Of Ahold's categories of financial instruments, only derivatives and assets available for sale are measured at fair value using Level 2
inputs. These are inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). The fair value of derivative instruments is estimated by discounting future cash flows with prevailing market rates
or based on the rates and quotations obtained from third parties.
The carrying amount of receivables, cash and cash equivalents, accounts payable, short-term deposits held to maturity, and other current
financial assets and liabilities approximate their fair values because of the short-term nature of these instruments and, for receivables,
because of the fact that any recoverability loss is reflected in an impairment loss. The fair values of quoted borrowings are based on year-
end ask-market quoted prices. The fair value of other non-derivative financial assets and liabilities that are not traded in an active market
are estimated using discounted cash flow analyses based on market rates prevailing at year end. The fair value calculation method and
the conditions for redemption and conversion of the cumulative preferred financing shares are disclosed in Note 22. The accrued interest
is included in other current financial liabilities (see Note 26) and not in the carrying amounts of non-derivative financial assets and liabilities
