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Risks arising from financial instruments (Tables)

12 Months Ended

Dec. 31, 2018

Set out below is an overview of financial assets¹ held by the company at year-end:


Million US dollar	31 December 2018		31 December 2017
Debt instruments at amortized cost
Trade and other receivables		6 298		6 537
Debt instruments at fair value through OCI
Unquoted debt		24		24
Debt instruments at fair value through profit or loss
Quoted debt		87		1 304
Equity instruments at fair value through OCI
Unquoted companies		84		76
Financial assets at fair value through profit or loss
Derivatives not designated in hedge accounting relationships:
Equity swaps		—		21
Interest rate swaps		9		—
Cross currency interest rate swaps		32		9
Other derivatives		20		1
Derivatives designated in hedge accounting relationships:
Foreign exchange forward contracts		191		151
Interest rate swaps		—		14
Commodities		54		246

		6 799		8 383
Of which:
Non-current		1 068		959
Current		5 731		7 444

¹	Cash and short term deposits are not included in this overview.

Disclosure of Financial Liabilities

Set out below is an overview of financial liabilities held by the company at year-end:


Million US dollar	31 December 2018		31 December 2017
Financial liabilities at fair value through profit or loss
Derivatives not designated in hedge accounting relationships:
Equity swaps		4 877		1 057
Cross currency interest rate swaps		387		906
Other derivatives		456		2
Derivatives designated in hedge accounting relationships:
Foreign exchange forward contracts		132		211
Cross currency interest rate swaps		103		—
Interest rate swaps		56		37
Commodities		273		67
Other derivatives		56		73
Financial liabilities at amortized cost
Trade and other payables		20 658		21 921
Non-current interest-bearing loans and borrowings:
Secured bank loans		109		230
Unsecured bank loans		86		153
Unsecured bond issues		105 170		108 327
Unsecured other loans		57		53
Finance lease liabilities		162		186
Current interest-bearing loans and borrowings:
Secured bank loans		370		272
Unsecured bank loans		22		739
Unsecured bond issues		2 626		4 510
Unsecured other loans		14		15
Commercial paper		1 142		1 870
Bank overdrafts		114		117
Finance lease liabilities		42		27

		136 912		140 773
Of which:
Non-current		108 012		111 191
Current		28 899		29 582

Summary of Notional Amounts of Derivatives Outstanding at Year-end by Maturity Bucket

The table below provides an overview of the notional amounts of derivatives outstanding at year-end by maturity bucket.


	31 December 2018										31 December 2017
Million US dollar	< 1 year		1-2 years		2-3 years		3-5 years		> 5 years		< 1 year		1-2 years		2-3 years		3-5 years		> 5 years
Foreign currency
Forward exchange contracts		11 423		190		—		—		—		11 637		233		—		—		—
Foreign currency futures		648		—		—		—		—		655		—		—		—		—
Interest rate
Interest rate swaps		2 250		750		28		1 873		36		1 075		2 250		750		1 883		88
Cross currency interest rate swaps		1 807		51		16		6 464		681		711		1 797		—		5 900		1 176
Other interest rate derivatives		4		—		—		—		565		—		—		5		—		565
Commodities
Aluminum swaps		1 597		73		—		—		—		1 412		21		—		—		—
Other commodity derivatives		1 241		32		—		—		—		1 214		144		—		—		—
Equity
Equity derivatives		11 347		—		—		—		—		11 799		—		—		—		—

Summary of Foreign Exchange Risk on Operating Activities

The second currency of the currency pairs listed is the functional currency of the related subsidiary.


	31 December 2018								31 December 2017
	Total			Total		Open			Total			Total		Open
Million US dollar	exposure			hedges		position			exposure			hedges		position
Euro/Canadian dollar		(39	)		39		—			(32	)		32		—
Euro/Mexican peso		(187	)		182		(5	)		(275	)		246		(29	)
Euro/Pound sterling		(239	)		213		(26	)		(82	)		110		28
Euro/Russian ruble		—			—		—			(58	)		68		10
Euro/South African rand		(90	)		52		(38	)		(84	)		84		—
Euro/South Korean won		(51	)		59		8			(53	)		44		(9	)
Euro/Ukrainian hryvnia		—			—		—			(58	)		—		(58	)
Euro/US dollar		(415	)		404		(11	)		(271	)		425		154
Mexican peso/Chinese yuan		(216	)		199		(17	)		—			—		—
Mexican peso/Euro		(300	)		301		1			—			—		—
Pound sterling/Euro		(34	)		34		—			(87	)		128		41
Pound sterling/US dollar		—			—		—			(40	)		40		—
US dollar/Argentinian peso		(573	)		484		(89	)		(678	)		678		—
US dollar/Australian dollar		(209	)		209		—			(469	)		192		(277	)
US dollar/Bolivian boliviano		(76	)		76		—			(20	)		20		—
US dollar/Brazilian real		(1 303	)		1 223		(80	)		(1 184	)		1 184		—
US dollar/Canadian dollar		(362	)		286		(76	)		(306	)		306		—
US dollar/Chilean peso		(156	)		155		1			(324	)		324		—
US dollar/Chinese yuan		(201	)		249		48			(303	)		134		(169	)
US dollar/Colombian peso		(287	)		219		(68	)		(319	)		195		(124	)
US dollar/Euro		(80	)		78		(2	)		(157	)		145		(12	)
US dollar/Mexican peso		(1 151	)		1 082		(69	)		(1 143	)		873		(270	)
US dollar/Nigerian naira		—			—		—			(172	)		—		(172	)
US dollar/Paraguayan guarani		(177	)		166		(11	)		(108	)		108		—
US dollar/Peruvian nuevo sol		(157	)		149		(8	)		(255	)		154		(101	)
US dollar/Russian ruble		—			—		—			(45	)		30		(15	)
US dollar/South African rand		(80	)		83		3			(72	)		66		(6	)
US dollar/South Korean won		(114	)		128		14			(20	)		60		40
US dollar/Ukrainian hryvnia		—			—		—			(18	)		—		(18	)
US dollar/Uruguayan peso		(40	)		41		1			(57	)		57		—
Others		(321	)		264		(57	)		(124	)		104		(20	)

Summary of Currency Transactional Risk

AB InBev estimated the reasonably possible change of exchange rate, on the basis of the average volatility on the open currency pairs, as follows:


	2018
	Closing rate 31 December 2018		Possible closing rate¹		Volatility of rates in %
Euro/Mexican peso		22.54		19.21 - 25.86		14.75	%
Euro/Pound sterling		0.89		0.84 - 0.95		6.03	%
Euro/South Korean won		1277.14		1181.98 - 1372.3		7.45	%
Euro/US dollar		1.15		1.06 - 1.23		7.32	%
Pound sterling/US dollar		1.28		1.17 - 1.39		8.45	%
US dollar/Australian dollar		1.42		1.30 - 1.54		8.50	%
US dollar/Chinese yuan		6.88		6.57 - 7.18		4.45	%
US dollar/Colombian peso		3246.70		2868.9 - 3624.5		11.64	%
US dollar/Euro		0.87		0.81 - 0.94		7.32	%
US dollar/Mexican peso		19.68		17.12 - 22.24		13.00	%
US dollar/Nigerian naira		362.54		354.9 - 370.18		2.11	%
US dollar/Peruvian nuevo sol		3.37		3.24 - 3.50		3.90	%
US dollar/South African rand		14.37		11.96 - 16.79		16.82	%
US dollar/South Korean won		1115.40		1029.1 - 1201.71		7.74	%
US dollar/Tanzanian shilling		2298.32		2211.95 - 2384.69		3.76	%
US dollar/Zambian kwacha		11.88		10.28 - 13.47		13.41	%

	2017
	Closing rate 31 December 2017		Possible closing rate²		Volatility of rates in %
Euro/Mexican peso		23.67		20.81 - 26.53		12.07	%
Euro/Pound sterling		0.89		0.82 - 0.96		7.94	%
Euro/Russian ruble		69.12		60.86 - 77.38		11.95	%
Euro/South Korean won		1 280.41		1 181.37 – 1 379.44		7.73	%
Euro/Ukrainian hryvnia		33.66		30.39 - 36.93		9.72	%
Euro/US dollar		1.20		1.11 - 1.28		7.12	%
Pound sterling/US dollar		1.35		1.16 - 1.54		13.99	%
US dollar/Australian dollar		1.28		1.18 - 1.38		7.50	%
US dollar/Chinese yuan		6.51		6.15 - 6.86		5.45	%
US dollar/Colombian peso		2 988.60		2 732.94 – 3 244.26		8.55	%
US dollar/Euro		0.83		0.77 - 0.89		7.12	%
US dollar/Mexican peso		19.74		17.45 - 22.02		11.59	%
US dollar/Nigerian naira		360.03		284.18 - 435.87		21.07	%
US dollar/Peruvian nuevo sol		3.24		3.11 - 3.38		4.19	%
US dollar/Russian ruble		57.63		51.43 - 63.83		10.76	%
US dollar/South African rand		12.35		10.44 - 14.25		15.39	%
US dollar/South Korean won		1 067.63		921.4 –1 213.86		13.70	%
US dollar/Tanzanian shilling		2 235.44		2 176.76 – 2 294.12		2.63	%
US dollar/Ukrainian hryvnia		28.07		26.86 - 29.27		4.30	%
US dollar/Zambian kwacha		9.98		8.91 - 11.05		10.72	%

Summary of Foreign Exchange Results Recognized on Unhedged and Hedged Exposures

Foreign exchange results recognized on unhedged and hedged exposures are as follows:


Million US dollar	2018			2017			2016
Cash flow hedges		—			(13	)		(53	)
Economic hedges		(210	)		(49	)		(36	)
Other results - not hedged		216			(242	)		68

		6			(304	)		(21	)

Summary of Effective Interest Rates at Balance Sheet

The table below reflects the effective interest rates of interest-bearing financial liabilities at balance sheet date as well as the currency in which the debt is denominated.


	Before hedging					After hedging
31 December 2018 Interest-bearing financial liabilities Million US dollar	Effective interest rate			Amount		Effective interest rate			Amount
Floating rate
Australian dollar		2.95	%		214		2.95	%		214
Brazilian real		9.13	%		61		6.86	%		133
Canadian dollar		3.66	%		190		3.38	%		206
Euro		0.24	%		3 138		0.24	%		3 138
US dollar		1.94	%		1 399		2.21	%		2 638
Other		7.19	%		709		7.19	%		709

					5 711					7 038
Fixed rate
Australian dollar		3.28	%		1 871		3.28	%		1 871
Brazilian real		6.74	%		138		5.79	%		66
Canadian dollar		3.23	%		1 904		3.23	%		1 904
Euro		1.76	%		27 465		1.61	%		35 292
Pound sterling		3.83	%		4 173		3.80	%		3 541
South Korean won		—			—		2.45	%		1 000
US dollar		4.28	%		68 570		4.66	%		59 120
Other		8.55	%		82		8.55	%		82

					104 203					102 876


31 December 2017	Before hedging					After hedging
Interest-bearing financial liabilities Million US dollar	Effective interest rate			Amount		Effective interest rate			Amount
Floating rate
Australian dollar		2.68	%		234		2.68	%		234
Brazilian real		9.22	%		122		7.61	%		199
Canadian dollar		2.09	%		207		2.45	%		224
Euro		0.35	%		3 398		0.35	%		3 415
South Africa rand		8.00	%		666		8.00	%		666
US dollar		1.48	%		1 285		1.43	%		2 521
Other		16.68	%		450		16.68	%		450

					6 362					7 709
Fixed rate
Australian dollar		3.70	%		1 838		3.70	%		1 838
Brazilian real		6.43	%		206		5.86	%		112
Canadian dollar		3.08	%		2 543		3.19	%		2 176
Euro		1.88	%		26 386		1.70	%		34 251
Peruvian nuevo sol		6.87	%		33		6.87	%		33
Pound sterling		3.83	%		4 403		3.80	%		3 734
South Korean won		—			—		2.50	%		1 000
US dollar		4.18	%		74 476		4.51	%		65 394
Other		3.36	%		252		2.36	%		252

					110 137					108 790

Summary of Floating Rate Debt after Hedging

The company estimated that the reasonably possible change of the market interest rates applicable to its floating rate debt after hedging is as follows:


	2018
	Interest rate 31 December 2018¹			Possible interest rate²			Volatility of rates in %
Brazilian real		6.44	%		6.12% - 6.76	%		5.00	%
Canadian dollar		2.29	%		2.15% - 2.42	%		5.91	%
Euro		—			—			2.45	%
US dollar		2.78	%		2.61% - 2.94	%		5.97	%


	2017
	Interest rate 31 December 2017¹			Possible interest rate²			Volatility of rates in %
Brazilian real		6.90	%		5.29% - 8.50	%		23.27	%
Canadian dollar		1.54	%		1.38% - 1.71	%		10.72	%
Euro		—			—			3.50	%
South African rand		7.16	%		6.88% - 7.43	%		3.84	%
US dollar		1.69	%		1.59% - 1.80	%		6.00	%

Summary of Interest Expense Recognized on Unhedged and Hedged Financial Liabilities

Interest expense recognized on unhedged and hedged financial liabilities are as follows:


Million US dollar	2018			2017			2016
Financial liabilities measured at amortized cost – not hedged		(4 053	)		(4 375	)		(4 119	)
Fair value hedges		(76	)		(11	)		(31	)
Cash flow hedges		22			1			(8	)
Net investment hedges - hedging instruments (interest component)		35			77			34
Economic hedges		100			(6	)		32

		(3 972	)		(4 314	)		(4 092	)

Schedule of Commodity Derivatives Outstanding

The commodity markets have experienced and are expected to continue to experience price fluctuations. AB InBev therefore uses both fixed price purchasing contracts and commodity derivatives to minimize exposure to commodity price volatility. The company has significant exposures to the following commodities: aluminum, barley, coal, corn grits, corn syrup, corrugated board, diesel, fuel oil, glass, hops, labels, malt, natural gas, orange juice, plastics, rice, steel and wheat. As of 31 December 2018, the company has the following commodity derivatives outstanding (in notional amounts):

¹	Applicable 3-month InterBank Offered Rates as of 31 December 2018 and as of 31 December 2017.

Sensitivity analysis is assessed based on the yearly volatility using daily observable market data during 250 days at 31 December 2018 and at December 2017. For the Brazilian real floating rate debt, the estimated market interest rate is composed of the InterBank Deposit Certificate (‘CDI’) and the Long-Term Interest Rate (‘TJLP’). With regard to other market interest rates, the company’s analysis is based on the 3-month InterBank Offered Rates applicable for the currencies concerned (e.g. EURIBOR 3M, LIBOR 3M).


Million US dollar	2018		2017
Aluminum swaps		1 670		1 412
Exchange traded sugar futures		62		87
Natural gas and energy derivatives		313		211
Corn swaps		196		223
Exchange traded wheat futures		424		509
Rice swaps		194		221
Plastic derivatives		84		91

		2 943		2 754

Summary of Estimated Impact on Changes in the Price of Commodities

The table below shows the estimated impact that changes in the price of the commodities, for which AB InBev held material derivative exposures at 31 December 2018, would have on the equity reserves.


	2018
				Pre-tax impact on equity
Million US dollar	Volatility of prices in %¹			Prices increase		Prices decrease
Aluminum		22.16	%		370		(370	)
Sugar		29.60	%		18		(18	)
Wheat		29.31	%		124		(124	)
Energy		23.83	%		74		(74	)
Rice		22.08	%		43		(43	)
Corn		23.85	%		47		(47	)
Plastic		20.54	%		17		(17	)


	2017
				Pre-tax impact on equity
Million US dollar	Volatility of prices in %²			Prices increase		Prices decrease
Aluminum		14.83	%		212		(212	)
Sugar		29.38	%		26		(26	)
Wheat		30.99	%		158		(158	)
Energy		20.37	%		43		(43	)
Rice		20.20	%		45		(45	)
Corn		24.81	%		45		(45	)
Plastic		17.50	%		15		(15	)

Summary of Carrying Amount of Financial Assets

The carrying amount of financial assets represents the maximum credit exposure of the company. The carrying amount is presented net of the impairment losses recognized. The maximum exposure to credit risk at the reporting date was:


	2018							2017
Million US dollar	Gross		Impairment			Net carrying amount		Gross		Impairment			Net carrying amount
Investment in unquoted companies		91		(7	)		84		83		(7	)		76
Investment in debt securities		111		—			111		1 328		—			1 328
Trade receivables		4 400		(160	)		4 240		4 917		(194	)		4 723
Cash deposits for guarantees		197		—			197		209		—			209
Loans to customers		188		—			188		179		—			179
Other receivables		2 359		(106	)		2 253		2 326		(117	)		2 209
Derivatives		307		—			307		483		—			483
Cash and cash equivalents		7 074		—			7 074		10 472		—			10 472

		14 727		(273	)		14 454		19 997		(318	)		19 679

Summary of Allowance for Impairment

The allowance for impairment recognized during the period per classes of financial assets was as follows:


	2018
Million US dollar	Trade receivables			Loans to customers		FVOCI			Other receivables			Total
Balance at 1 January		(194	)		—		(7	)		(117	)		(318	)
Impairment losses		(40	)		—		—			(3	)		(43	)
Derecognition		29			—		—			6			35
Currency translation and other		44			—		—			9			53

Balance at 31 December		(160	)		—		(7	)		(106	)		(273	)


	2017
Million US dollar	Trade receivables			Loans to customers		FVOCI			Other receivables			Total
Balance at 1 January		(202	)		—		(7	)		(109	)		(318	)
Impairment losses		(55	)		—		—			(4	)		(59	)
Derecognition		53			—		—			1			54
Currency translation and other		10			—		—			(5	)		5

Balance at 31 December		(194	)		—		(7	)		(117	)		(318	)


	2016
Million US dollar	Trade receivables			Loans to customers		FVOCI			Other receivables			Total
Balance at 1 January		(230	)		—		(9	)		(99	)		(338	)
Impairment losses		(43	)		—		—			—			(43	)
Derecognition		69			—		—			2			71
Currency translation and other		2			—		2			(12	)		(8	)

Balance at 31 December		(202	)		—		(7	)		(109	)		(318	)

Summary of Nominal Contractual Maturities of Non-Derivative Financial Liabilities

The following are the nominal contractual maturities of non-derivative financial liabilities including interest payments and derivative financial assets and liabilities:


	31 December 2018
Million US dollar	Carrying amount¹			Contractual cash flows			Less than 1 year			1-2 years			2-3 years			3-5 years			More than 5 years
Non-derivative financial liabilities
Secured bank loans		(479	)		(496	)		(383	)		(39	)		(15	)		(27	)		(31	)
Commercial papers		(1 142	)		(1 142	)		(1 142	)		—			—			—			—
Unsecured bank loans		(108	)		(135	)		(33	)		(6	)		(96	)		—			—
Unsecured bond issues		(107 796	)		(165 979	)		(6 410	)		(9 146	)		(11 636	)		(23 672	)		(115 115	)
Unsecured other loans		(71	)		(110	)		(19	)		(22	)		(12	)		(12	)		(44	)
Finance lease liabilities		(204	)		(316	)		(62	)		(37	)		(33	)		(33	)		(151	)
Bank overdraft		(114	)		(114	)		(114	)		—			—			—			—
Trade and other payables		(24 345	)		(24 722	)		(22 557	)		(260	)		(1 060	)		(333	)		(513	)

		(134 258	)		(193 014	)		(30 720	)		(9 510	)		(12 852	)		(24 077	)		(115 855	)
Derivative financial assets/(liabilities)
Interest rate derivatives		(84	)		(86	)		(39	)		(19	)		(8	)		11			(31	)
Foreign exchange derivatives		(391	)		(401	)		(419	)		18			—			—			—
Cross currency interest rate swaps		(456	)		(457	)		(13	)		113			129			(595	)		(90	)
Commodity derivatives		(225	)		(225	)		(222	)		(3	)		—			—			—
Equity derivatives		(4 877	)		(4 877	)		(4 877	)		—			—			—			—

		(6 033	)		(6 046	)		(5 570	)		109			121			(584	)		(121	)
Of which: related to cash flow hedges		(293	)		(303	)		(233	)		17			2			2			(90	)


	31 December 2017
Million US dollar	Carrying amount			Contractual cash flows			Less than 1 year			1-2 years			2-3 years			3-5 years			More than 5 years
Non-derivative financial liabilities
Secured bank loans		(502	)		(590	)		(318	)		(137	)		(23	)		(42	)		(70	)
Commercial papers		(1 870	)		(1 871	)		(1 871	)		—			—			—			—
Unsecured bank loans		(892	)		(927	)		(761	)		(129	)		(37	)		—			—
Unsecured bond issues		(112 837	)		(167 056	)		(8 951	)		(13 951	)		(12 908	)		(24 655	)		(106 591	)
Unsecured other loans		(68	)		(114	)		(17	)		(23	)		(13	)		(7	)		(54	)
Finance lease liabilities		(213	)		(301	)		(42	)		(42	)		(32	)		(40	)		(145	)
Bank overdraft		(117	)		(117	)		(117	)		—			—			—			—
Trade and other payables		(26 167	)		(26 628	)		(24 756	)		(476	)		(207	)		(289	)		(900	)

		(142 666	)		(197 604	)		(36 833	)		(14 758	)		(13 220	)		(25 033	)		(107 760	)
Derivative financial assets/(liabilities)
Interest rate derivatives		(96	)		(101	)		(9	)		(21	)		(14	)		16			(73	)
Foreign exchange derivatives		(61	)		(52	)		(59	)		7			—			—			—
Cross currency interest rate swaps		(897	)		(1 043	)		65			(128	)		114			(904	)		(190	)
Commodity derivatives		179			143			139			4			—			—			—
Equity derivatives		(1 036	)		(1 134	)		(1 134	)		—			—			—			—

		(1 911	)		(2 187	)		(998	)		(138	)		100			(888	)		(263	)
Of which: related to cash flow hedges		(20	)		(29	)		64			5			2			4			(104	)

Summary for Each Type of Derivative Fair Value Recognized as Assets and Lliabilities

The following table summarizes for each type of derivative the fair values recognized as assets or liabilities in the balance sheet:


	Assets				Liabilities						Net
Million US dollar	31 December 2018		31 December 2017		31 December 2018			31 December 2017			31 December 2018			31 December 2017
Foreign currency
Forward exchange contracts		191		151		(586	)		(211	)		(395	)		(60	)
Foreign currency futures		7		1		(3	)		(2	)		4			(1	)
Interest rate
Interest rate swaps		9		14		(27	)		(37	)		(18	)		(23	)
Cross currency interest rate swaps		32		9		(489	)		(906	)		(457	)		(897	)
Other interest rate derivatives		20		—		(86	)		(73	)		(66	)		(73	)
Commodities
Aluminum swaps		23		178		(172	)		(5	)		(149	)		173
Sugar futures		—		24		(8	)		(20	)		(8	)		4
Wheat futures		13		34		(11	)		(22	)		2			12
Energy		4		—		(54	)		—			(50	)		—
Other commodity derivatives		8		10		(28	)		(20	)		(20	)		(10	)
Equity
Equity derivatives		—		21		(4 877	)		(1 057	)		(4 877	)		(1 036	)

		307		442		(6 340	)		(2 353	)		(6 033	)		(1 911	)
Of which:
Non-current		10		25		(805	)		(937	)		(795	)		(912	)
Current		297		417		(5 535	)		(1 416	)		(5 238	)		(999	)

Summary of Carrying Amount of Fixed Rate Interest-Bearing Financial Liabilities and Fair Value

The following table summarizes the carrying amount and the fair value of the fixed rate interest-bearing financial liabilities as recognized at the balance sheet. Floating rate interest-bearing financial liabilities, trade and other receivables and trade and other payables, including derivatives financial instruments, have been excluded from the analysis as their carrying amount is a reasonable approximation of their fair value:


Interest-bearing financial liabilities Million US dollar	2018 Carrying amount¹			2018 Fair value			2017 Carrying amount¹			2017 Fair value
Fixed rate
Australian dollar		(1 871	)		(1 927	)		(1 838	)		(1 896	)
Brazilian real		(138	)		(138	)		(206	)		(206	)
Canadian dollar		(1 904	)		(1 817	)		(2 543	)		(2 574	)
Euro		(27 465	)		(26 799	)		(26 386	)		(26 942	)
Peruvian nuevo sol		(24	)		(24	)		(33	)		(33	)
Pound sterling		(4 173	)		(4 320	)		(4 403	)		(4 902	)
US dollar		(68 570	)		(65 873	)		(74 476	)		(83 482	)
Other		(58	)		(58	)		(252	)		(252	)

		(104 203	)		(100 956	)		(110 137	)		(120 287	)

Analysis of Financial Instruments

The table sets out the fair value hierarchy based on the degree to which significant market inputs are observable:


Fair value hierarchy 31 December 2018 Million US dollar	Quoted (unadjusted) prices - level 1		Observable market inputs - level 2		Unobservable market inputs - level 3
Financial Assets
Held for trading (non-derivatives)		3		9		—
Derivatives at fair value through profit and loss		—		67		—
Derivatives in a cash flow hedge relationship		7		225		—
Derivatives in a fair value hedge relationship		—		33		—
Derivatives in a net investment hedge relationship		—		14		—

		10		348		—
Financial Liabilities
Deferred consideration on acquisitions at fair value		—		—		1 409
Derivatives at fair value through profit and loss		—		5 699		—
Derivatives in a cash flow hedge relationship		18		507		—
Derivatives in a fair value hedge relationship		—		125		—
Derivatives in a net investment hedge relationship		—		31		—

		18		6 362		1 409

¹	“Carrying amount” refers to net book value as recognized in the balance sheet at each reporting date.


Fair value hierarchy 31 December 2017 Million US dollar	Quoted (unadjusted) prices - level 1		Observable market inputs - level 2		Unobservable market inputs - level 3
Financial Assets
Held for trading (non-derivatives)		1 304		5		—
Derivatives at fair value through profit and loss		—		89		—
Derivatives in a cash flow hedge relationship		9		340		—
Derivatives in a fair value hedge relationship		—		36		—
Derivatives in a net investment hedge relationship		—		9		—

		1 313		479		—
Financial Liabilities
Deferred consideration on acquisitions at fair value		—		—		2 210
Derivatives at fair value through profit and loss		1		1 210		—
Derivatives in a cash flow hedge relationship		28		341		—
Derivatives in a fair value hedge relationship		—		129		—
Derivatives in a net investment hedge relationship		—		685		—

		29		2 365		2 210

Summary of Hedging Reserve and Hedging Instruments

The company’s hedging reserves disclosed in note 23 relate to the following instruments:


Million US dollar	Foreign currency			Interest rate		Commodities			Others		Total hedging reserves
As per 1 January 2018		559			—		(20	)		47		586
Change in fair value of hedging instrument recognized in OCI		262			—		97			—		358
Reclassified to profit or loss / cost of inventory		(341	)		—		(137	)		26		(452	)
Deferred tax		—			—		—			2		2

As per 31 December 2018		480			—		(60	)		76		494


Million US dollar	Foreign currency			Interest rate		Commodities			Others		Total hedging reserves
As per 1 January 2017		540			—		204			—		744
Change in fair value of hedging instrument recognized in OCI		(61	)		—		(22	)		—		(83	)
Reclassified to profit or loss / cost of inventory		80			—		(202	)		47		(75	)
Deferred tax		—			—		—			—		—

As per 31 December 2017		559			—		(20	)		47		586

Summary of Offsetting Financial Assets and Liabilities

The following financial assets and liabilities are subject to offsetting, enforceable master netting agreements and similar agreements:


	31 December 2018
Million US dollar	Gross amount			Net amount recognized in the statement of financial position¹			Other offsetting agreements²			Total net amount
Derivative assets		307			307			(293	)		13
Derivative liabilities		(6 340	)		(6 340	)		293			(6 046	)

¹	Net amount recognized in the statement of financial position after taking into account offsetting agreements that meet the offsetting criteria as per IFRS rules

²	Other offsetting agreements include collateral and other guarantee instruments, as well as offsetting agreements that do not meet the offsetting criteria as per IFRS rules


	31 December 2017
Million US dollar	Gross amount			Net amount recognized in the statement of financial position¹			Other offsetting agreements²			Total net amount
Derivative assets		483			483			(466	)		17
Derivative liabilities		(2 394	)		(2 394	)		466			(1 928	)