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DES GB2013 E

DEUTSCHEEUROSHOPANNUALREPORT2013/CONSOLIDATEDFINANCIALSTATEMENTS 159 No appraisal report was produced for the properties owned by CASPIA Investments Sp. z o.o., Warsaw, due to their lesser importance. The properties were also recognised at market value in accordance with IAS 40. Details and information on the levels of the fair value of the Group’s investment property as at 31 December 2013 are shown below as per IFRS 13: Level 1 Level 2 Level 3 Investment Properties 2,962,163 No reclassifications between the levels of the hierarchy have been made in the current financial year. LEASE AGREEMENTS In line with IAS 17, the tenancy agreements in the Deutsche EuroShop Group are classified as operating leases. The operating lease agreements relate to investment property owned by the Group with long-term leases. Rental income from operating leases is recognised in income on a straight-line basis over the term of the corresponding lease. The lessee has no opportunity to acquire the property at the end of the term. FINANCIAL INSTRUMENTS Financial assets and liabilities are recognised in the consolidated balance sheet when the Group becomes a party to the contractual provisions governing the financial instrument. Financial instruments are generally recognised at fair value. The fair value is the price that would in an orderly trans- action between market participants on the measurement date have been received for the sale of an asset or paid for the transfer of a liability. When measuring the fair value it is assumed that the transaction underlying the price is taking place in a main market to which the Group has access. The price is calculated on the basis of the assumptions that market participants would make when determining the price. When determining fair value, three assessment categories are differentiated in accordance with IFRS 13: Level 1: At the first level of the “fair value hierarchy”, fair values are determined using publicly quoted market prices, as the best-possible objective indication of the fair value of a financial asset or liability can be observed on an active market. Level 2: If there is no active market for an instrument, a company determines the fair value using measurement models. These models include use of the most recent arm’s-length transactions between knowledgeable and willing parties, comparison with the current fair value of another, essentially identical financial instruments, use of the discounted cash flow method and option pricing models. The fair value is estimated on the basis of the results of a method of measurement that uses data from the market to the greatest possible extent and is based as little as possible on company-specific data. Level 3: The measurement models used for this level are also based on parameters that are not observable on the market. € THOUSAND

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