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20. 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 2020            
Assets            
Cash and cash equivalents   2 778     2 778
Trade and other receivables   9 717     9 717
Non-current loan to associates   365       365
Non-current financial assets     25   25
Total financial assets   12 860   25   12 885
in thousand EUR   at amortized
costs
  at fair value
through OCI
  Total
31 December 2019            
Assets            
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   8 870   25   8 894
in thousand EUR   2020   2019
Liabilities at amortized costs        
Trade and other payables   10 554   10 446
Loans, interest payables and legal liabilities   42 338   42 035
Lease liabilities   2 350   2 173
Total financial liabilities   55 242   54 654
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 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 amounts of financial instruments correspond 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 2020   Level 1   Level 2   Level 3
Non-current financial assets   25       25
Biological assets   10 162       10 162
Land   42 178     42 178  
Total assets measured at fair value   52 365     42 178   10 187
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
Reconciliation of fair value measurement of level 3 financial assets
in thousand EUR   2020   2019
At 1 January   13 183   466
Reversal of impairment     576
Reclassification to assets held for sale     –1 024
Gain from changes in fair value from biological assets   927   13 158
Currency effects   –3 923   6
At 31 December   10 187   13 183