Note 4

Financial instruments

All lending and receivables are recorded at amortised cost. Amortised cost is also used for fixed and floating rate securities issued.

The company's debt securities issued with fixed interest rates are accounted for using fair value hedging. Losses and gains, resulting from changes in value due to changes in market interest, of debt securities with fixed interest are recognised in the income statement in the period they arise.

Market prices are used to price lending to and receivables from financial institutions and lending to customers. The prices set include a mark-up for the relevant credit risk. Fair value is estimated as the carrying amount of the lending and receivables stated at amortised cost after deducting impairment.

There are no major differences between the book value and the fair value of loans to credit institutions and customers, and liabilities to credit institutions agreed at variable rates and recognised at amortised cost. Fair value of debt securities is calculated allowing for change in the market interest rates and change in the credit margin.

Financial derivatives related to the company`s debt securities issued are carried at fair value through profit or loss, and recognised gross per contract, as either asset or debt.

CLASSIFICATION OF FINANCIAL INSTRUMENTSFinancial instruments at fair value through profit or lossFinancial assets and liabilities carried at amortised cost
 31.12.201631.12.201531.12.201631.12.2015
Loans to and receivables from credit institutions  271285
Loans to and receivables from customers  19 81016 907
Certificates and bonds522403  
Financial derivatives368485  
Total assets89088820 08117 192
Loans from credit institutions  1 141970
Debt securities issued  18 26515 711
Financial derivatives46  
Total liabilities4619 40616 681
FAIR VALUE OF FINANCIAL INSTRUMENTS AT AMORTISED COST31.12.201631.12.2015
 Fair valueBook valueFair valueBook value
Loans to and receivables from credit institutions271271285285
Loans to and receivables from customers19 81019 81016 90716 907
Total assets20 08120 08117 19217 192
Loans from credit institutions1 1411 141970970
Debt securities issued18 25718 26515 59515 711
Total liabilities19 39819 40616 56516 681
FINANCIAL INSTRUMENTS AT AMORTISED COST - 31.12.2016Based on prices in an active marketObservable market informationOther than observable market information 
 Level 1Level 2Level 3Total
Loans to and receivables from credit institutions-271-271
Loans to and receivables from customers--19 81019 810
Total assets-27119 81020 081
Loans from credit institutions-1 141-1 141
Debt securities issued-18 257-18 257
Total liabilities-19 398-19 398
     
     
FINANCIAL INSTRUMENTS AT AMORTISED COST - 31.12.2015Based on prices in an active marketObservable market informationOther than observable market information 
 Level 1Level 2Level 3Total
Loans to and receivables from credit institutions-285-285
Loans to and receivables from customers--16 90716 907
Total assets-28516 90717 192
Loans from credit institutions-970-970
Debt securities issued-15 595-15 595
Total liabilities-16 565-16 565
     
     
FINANCIAL INSTRUMENTS AT FAIR VALUE - 31.12.2016Based on prices in an active marketObservable market informationOther than observable market information 
 Level 1Level 2Level 3Total
Certificates and bonds-522-522
Financial derivatives-368-368
Total assets-890-890
Financial derivatives-4-4
Total liabilities-4-4
     
     
FINANCIAL INSTRUMENTS AT FAIR VALUE - 31.12.2015Based on prices in an active marketObservable market informationOther than observable market information 
 Level 1Level 2Level 3Total
Certificates and bonds-403-403
Financial derivatives-485-485
Total assets-888-888
Financial derivatives-6-6
Total liabilities-6-6