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21. Financial instruments by category and Fair value hierarchy

Financial instruments by category
in thousand EUR   at amortized
costs
  at fair value
through OCI
  Total
31 December 2019            
Assets            
Right-of-use assets   3 249     3 249
Cash and cash equivalents   2 578     2 578
Trade and other receivables   6 292     6 292
Non-current financial assets     25   25
Total financial assets   12 119   25   12 144
in thousand EUR   at amortized
costs
  at fair value
through OCI
  Total
31 December 2018            
Assets            
Cash and cash equivalents   2 798     2 798
Trade and other receivables   7 511     7 511
Non-current financial assets     466   466
Total financial assets   10 309   466   10 775
in thousand EUR   2019   2018
Liabilities at amortized costs        
Trade and other payables   10 446   9 448
Financial liabilities   42 035   35 340
Lease liabilities   2 173   1 900
Total financial liabilities   54 654   46 688
Accounting policies

Financial assets are categorized as current assets if they are expected to be realized within 12 months from the reporting date otherwise they are included in non-current assets. Trade accounts receivables and other current assets are measured at amortized cost less allowances for expected credit losses. Financial assets at fair value through profit or loss are subsequently measured at fair value, with changes in fair value recorded in the statement of profit or loss. Financial assets at fair value through OCI are subsequently measured at fair value, with changes in fair value recorded in other comprehensive income.

Trade accounts payables and current liabilities are categorized as current liabilities if they are expected to be realized within 12 months from the reporting date otherwise they are included in non-current liabilities. They are measured at amortized cost. Borrowings are classified as current liabilities unless Precious Woods has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. They are initially recorded at fair value, net of transaction costs, and subsequently measured at amortized cost according to the effective interest rate method.

Cash and cash equivalents comprise cash at bank and in hand and short-term highly liquid deposits with an original maturity of three months or less. They are recorded at nominal value. Bank overdrafts are presented within current financial liabilities.

Fair value hierarchy

The carrying amount of financial instruments corresponds approximately to their fair value. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1 – quoted (unadjusted) prices in active markets for identical assets or liabilities

Level 2 – other techniques for which all inputs that have a significant effect on the recorded fair value are observable, either directly or indirectly

Level 3 – techniques that use inputs, which have a significant effect on the recorded fair value, and which are not based on observable market data

Assets measured at fair value
in thousand EUR   31 December 2019   Level 1   Level 2   Level 3
Non-current financial assets   25       25
Biological assets   13 158       13 158
Land   56 331     56 331  
Total assets measured at fair value   69 514     56 331   13 183
in thousand EUR   31 December 2018   Level 1   Level 2   Level 3
Non-current financial assets   466       466
Total assets measured at fair value   466       466
Reconciliation of fair value measurement of level 3 financial assets
in thousand EUR   2019   2018
At 1 January   466   449
Reversal of impairment   576  
Reclassification to assets held for sale   –1 024  
Initial recognition of biological assets   13 158    
Currency effects   6   17
At 31 December   13 183   466