Fair value estimation
For those financial assets and liabilities which have been recognized at fair value in the ´Consolidated Statement of Financial Position´, the following measurement hierarchy and valuation methods have been applied:
Quoted unadjusted prices at the balance sheet date in active markets. The market prices are readily and regularly available from an exchange, dealer, broker, market information service system, pricing service or regulatory agency. The quoted market price used for financial assets is the current bid price. Level 1 financial instruments include debt and equity investments classified as financial instruments available-for-sale.
The fair value of financial instruments in Level 2 is determined using valuation techniques. These techniques utilize observable market data readily and regularly available from an exchange, dealer, broker, market information service system, pricing service or regulatory agency. Level 2 financial instruments include over-the-counter derivatives classified as financial assets/liabilities at fair value through profit and loss or qualified for hedge accounting.
A financial instrument is categorized into Level 3 if the calculation of the fair value cannot be based on observable market data.
The tables below present Valmet’s financial assets and liabilities that are measured at fair value. There have been no transfers between fair value levels during 2016. Fair value levels of other financial assets and liabilities are shown in Financial Statements 2016 Note 6.
There were no changes in level 3 instruments for the 12 months ended December 31, 2016.