Note 8 Financial instruments CLASSIFICATION OF FINANCIAL INSTRUMENTS 31 Dec. 2021 31 Dec. 2020 Amounts in NOK million Fair value through profit or loss Amortised cost Total Fair value through profit or loss Amortised cost Total Loans and deposits with credit institutions - 1,301.8 1,301.8 - 1,204.2 1,204.2 Loans to customers - 7,397.8 7,397.8 - 8,361.2 8,361.2 Certifcates and bonds 883.0 - 883.0 1,848.0 - 1,848.0 Other receivables - 278.0 278.0 - - - Total financial assets 883.0 8,977.6 9,860.6 1,848.0 9,565.4 11,413.4 Deposit from customers - 7,933.9 7,933.9 - 8,991.8 8,991.8 Other debt - 38.6 38.6 - 27.5 27.5 Subordinated loans - 65.0 65.0 - 65.0 65.0 Total financial liabilities - 8,037.5 8,037.5 - 9,084.2 9,084.2 FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES ASSESSED AT AMORTISED COST Loans and deposits with credit institutions Fair value is estimated to correspond to amortised cost. Loans to customers Loans to customers are highly exposed to market competition, so that any additional values in the loan balance will not be able to be maintained over time. At the same time, an impairment is recognised for this accounting item if observable events occur that indicate a fall in value. The impairments are based on an assessment of the future cash flow, discounted by the effective rate of interest. The fair value is therefore essentially regarded as corresponding to amortised cost. Other receivables Fair value is estimated to correspond to amortised cost. Deposits from customers Fair value is estimated to correspond to amortised cost. Other debt Fair value is estimated to correspond to amortised cost. Subordinated loans The Bank’s subordinated loans are listed, but the instrument is traded at a relatively low frequency. As a substitute for the observable prices, it is considered that amortised cost can be used as an approximation of fair value. FINANCIAL INSTRUMENTS AT FAIR VALUE Financial instruments at fair value are placed in the different levels below based on the quality of market data for the individual type of instrument. Level 1: Valuation based on listed prices in an active market Level 1 includes financial instruments that are valued using listed prices in active markets for identical assets or liabilities. The category includes certificates and government bonds that are traded in active markets. Level 2: Valuation based on observable market data In level 2, valuation is based on (1) directly or indirectly observable prices for identical assets or liabilities in a market that is not active, (2) models that use prices and variables from observable markets or transactions and (3 ) pricing in an active market of a similar, but not identical, asset or liability. Level 3: Valuation based on non-observable market data If a valuation cannot be established in levels 1 or 2, valuation methods are used that are based on non-observable market data. 31 December 2021 31 December 2020 Amounts in NOK million Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Certificates and bonds - 883.0 - 883.0 - 1,848.0 - 1,848.0 Total financial assets - 883.0 - 883.0 - 1,848.0 - 1,848.0 Certificates and bonds are valued to listed prices when available. Komplett Bank / Annual Report 2021 63
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