METSÄ BOARD Annual review 2023
■ 5.7 Classification and fair values of financial assets and liabilities
Fair value hierarchy of financial assets and liabilities
Classification and fair values of financial assets and liabilities 2023
Business operations and value creation 2 This is Metsä Board 4 CEO’s review 6
Fair value through profit and loss
Fair value through other comprehensive income
Accounting principles Financial assets and liabilities measured at fair value have been cate- gorised as follows: Level 1 Fair value is based on quoted prices in active markets. Level 2 Fair value is determined by using valuation techniques that use observable price information from market. Level 3 Fair value are not based on observable market data, but on company’s own assumptions.
The fair values of electricity, natural gas and fuel oil derivatives are determined by using public price quotations in an active market (Level 1). The fair values of currency forwards and options are determined by using the market prices of the closing date of the reporting period. The fair values of interest rate swaps are determined by using the present value of expected payments, discounted using a risk adjusted discount rate, supported by market interest rates and other market data of the closing date of the reporting period (Level 2). For financial instruments not traded on an active market, the fair value is determined by valuation techniques. Judgment is used when choosing the different techniques and making assumptions, which are mainly based on circumstances prevailing in the markets on each closing date of the reporting period (Level 3).
EUR million
Note
Amortised cost Total carrying amount
Financial assets Other non-current investments Other non-current financial assets Trade receivables and other receivables
4.3 5.3 4.5 5.4 5.7
1.4
253.0
254.4
6.3
6.3
Strategy and financial targets
251.7 291.6
251.7 291.6
8
Value creation
Cash and cash equivalents Derivative financial instruments
1.2 2.6 2.6
30.3
31.5
Total carrying amount
283.3 283.3
549.6 549.6
835.5 835.5
Financial development 10 Key figures 12
Total fair value
Financial liabilities Non-current interest-bearing financial liabilities Other non-current financial liabilities Current interest-bearing financial liabilities
Report of the Board of Directors
5.3 4.7 5.5 4.7 5.7
421.0
421.0
The fair value measurement of financial assets at fair value recognised under other items of comprehensive income is described in Note 4.3.
20 72
• Sustainability statement • Sustainability statement assurance report
0.5 17.1
0.5 17.1
Trade payables and other liabilities Derivative financial instruments
338.9
338.9
0.4 0.4 0.4
9.8 9.8 9.8
10.2
74
Consolidated financial statements
Total carrying amount
777.5 767.2
787.6 777.3
Total fair value
78 Notes to the consolidated financial statements 126 Parent company financial statements 129 Notes to the parent company financial statements 142 The Board’s proposal to the Annual General Meeting for the distribution of funds 143 Auditor’s Report 147 Shares and shareholders 151 Ten years in figures 152 Taxes 153 Production capacities 155 Calculation of key ratios and comparable performance measures Corporate governance 157 Corporate governance statement 165 • Board of Directors of Metsä Board 168 • Corporate Management Team of Metsä Board
Fair value hierarchy of financial assets and liabilities 2023
Classification and fair values of financial assets and liabilities 2022
31 Dec 2023
EUR million
Note
Level 1
Level 2
Level 3
Total
Fair value through profit and loss
Fair value through other comprehensive income
Financial assets at fair value Other non-current investments
EUR million
Note
Amortised cost Total carrying amount
4.3
254.4
254.4
Financial assets Other non-current investments Other non-current financial assets Trade receivables and other receivables
4.3 5.3 4.5 5.4 5.7
1.3
344.1
345.4
Derivative financial assets
5.7
0.2
31.4
31.5
6.0
6.0
Financial liabilities measured at fair value Derivative financial liabilities Financial assets not measured at fair value Cash and cash equivalents Financial liabilities not measured at fair value Non-current interest-bearing financial liabilities
354.5 356.2
354.5 356.2
5.7
4.1
6.0
10.2
Cash and cash equivalents Derivative financial instruments
4.2 5.5 5.5
39.3
43.4
5.4
291.5
291.5
Total carrying amount
383.4 383.4
716.8 716.7
1,105.6 1,105.6
Total fair value
5.5 5.5
411.1
411.1
Current interest-bearing financial liabilities
16.7
16.7
Financial liabilities Non-current interest-bearing financial liabilities Other non-current financial liabilities Current interest-bearing financial liabilities
5.3 4.7 5.5 4.7 5.7
434.4
434.4
2.9
2.9
Fair value hierarchy of financial assets and liabilities 2022
18.6
18.6
31 Dec 2022
Trade payables and other liabilities Derivative financial instruments
444.3
444.3
EUR million
Note
Level 1
Level 2
Level 3
Total
0.7 0.7 0.7
29.5 29.5 29.5
30.2
Financial assets at fair value Other non-current investments
Total carrying amount
900.1 879.3
930.3 909.5
4.3
345.4
345.4
Total fair value
Derivative financial assets
5.7
6.7
36.7
43.4
Financial liabilities measured at fair value Derivative financial liabilities Financial assets not measured at fair value Cash and cash equivalents Financial liabilities not measured at fair value Non-current interest-bearing financial liabilities
5.7
5.0
25.2
30.2
Trade receivables and other receivables do not include advance payments, accrued tax receivables and periodisations of employee costs (Note 4.5). Trade payables and other financial liabilities do not include advance pay- ments, accrued tax liabilities and periodisations of employee costs (Note 4.7). In Metsä Board, all interest-bearing liabilities are valued in the balance sheet at amortised cost based on effective interest method.
Fair values are based on present value of cash flow of each liability or assets calculated by market rate. The discount rates applied are between 1.9–4.3 per cent (2.2–4.6). The fair values of accounts and other receiva- bles and trade payables and other liabilities do not materially deviate from their carrying amounts in the balance sheet.
5.4
356.2
356.2
5.5 5.5
413.6
413.6
170 Remuneration report 174 Investor relations and investor information
Current interest-bearing financial liabilities
18.6
18.6
Other non-current investments measured at fair value based on level 3 valuation
EUR million
2023
2022
Value 1 Jan
345.4
181.0
Total gains and losses in profit and loss
2.8
Total gains and losses in other comprehensive income
-91.1
178.5
Purchases
0.0 0.0
0.0
Sales
-16.9 345.4
Value Dec 31.
254.4
114
115
Consolidated financial statements | METSÄ BOARD ANNUAL REVIEW 2023
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