4 Fair Value Measurement

MorphoSys uses the following hierarchy to determine and disclose the fair value of financial instruments.

Level 1:
Quoted (unadjusted) prices on active markets for identical assets or liabilities.
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices)
Level 3:
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)

The carrying amounts of financial assets and liabilities such as cash and cash equivalents, marketable securities, accounts receivable, and accounts payable approximate their fair values due to their short-term maturities. The fair value of marketable securities is based upon quoted market prices (hierarchy Level 1, quoted prices in active markets). There were no financial assets or liabilities allocated to hierarchy Levels 2 or 3. There were no transfers from one fair value hierarchy level to another carried out in either 2014 or 2013.

The fair value of financial assets and liabilities and the carrying amounts presented in the consolidated balance sheet are composed as follows.

30 September 2014  Note   Loans and
Receivables  
Available for Sale  Other Financial Liabilities   Total Carrying Amount   Fair value  
(in 000’s €)            
Cash and Cash Equivalents   74,009 0 0 74,009 74,009
Accounts Receivable   13,442 0 0 13,442 *
Forward Exchange Contracts Used for Hedging   11 0 0 11 11
Other Receivables 3 191,974 0 0 191,974 191,974
Shares, Available-for-Sale, Net of Current Portion   0 1,727 0 1,727 *
Available-for-sale Financial Assets 3 0 93,404 0 93,404 93,404
Bonds, Available-for-sale 3 0 4,979 0 4,979 4,979
  279,436 100,110 0 379,546 364,377
Convertible Bonds - Liabilitiy Component   0 0 (273) (273) (273)
Accounts Payable and Accrued Expenses   0 0 (18,441) (18,441) (18,441)
0 0 (18,714) (18,714) (18,714)

* Disclosure waived in accordance with IFRS 7.29 (a)

31 December 2013  Note  Loans and
Receivables 
Available
for Sale 
Other Financial Liabilities   Total Carrying Amount   Fair value 
(in 000’s €)            
Cash and Cash Equivalents   71,874 0 0 71,874 71,874
Accounts Receivable   10,270 0 0 10,270 *
Other Receivables 3 119,458 0 0 119,458 119,458
Shares, Available-for-Sale, Net of Current Portion   0 1,727 0 1,727 *
Available-for-sale
Financial Assets
3 0 188,360 0 188,360 188,360
Bonds, Available-for-sale 3 0 11,102 0 11,102 11,102
201,602 201,189 0 402,791 390,794
Convertible Bonds - Liabilitiy Component   0 0 299 (299) (299)
Accounts Payable and Accrued Expenses   0 0 17,190 (17,190) (17,190)
    0 0 (17,489) (17,489) (17,489)

* Disclosure waived in accordance with IFRS 7.29 (a)

Top