10.2 Fair value hierarchy

On the basis of the input data used for fair value measurement, individual assets and liabilities for which the fair value is presented, are classified to the following levels:

• Level I – financial assets and liabilities measured based on listed prices (unadjusted) from active markets for identical assets and liabilities.
  • listed liquid debt instruments;
  • listed shares;
  • listed derivatives.
• Level II – assets and liabilities measured based on input data other than listed prices, classified to Level I, which can be directly (as prices) or indirectly (on the basis of prices) observed on the market.
  • unlisted debt securities and non-liquid debt securities (including other than treasury debt securities issued by other financial entities, local government and entities from outside the financial sector);
  • derivatives other than listed ones;
  • investment property or property held for sale, measured with the use of the comparable method, including available development land and some smaller and less valuable buildings (such as residential premises, garages etc.);
  • liabilities to participants in consolidated investment funds;
•  Level III – assets measured based on input data unobserved on the existing markets (unobservable input data). This level includes:
  • investment property or property held for sale, measured using the income method or the residual method;
  • loan receivables from clients and liabilities to clients from deposits.

In a situation where input data classified into different levels of fair value hierarchy is used for measurement of asset or liability elements, the measured component is attributed to the lowest level, from which the input data originate, which have a significant impact on the overall measurement.