6. FINANCIAL INSTRUMENTS BY CATEGORY

The following tables show the financial assets and liabilities by category of financial instrument and a reconciliation to the corresponding line item in the statements of financial position, as appropriate. Since the line items “Trade receivables”, “Other receivables”, “Accounts payable” and “Other liabilities” contain both financial instruments and non-financial assets and liabilities (such as tax receivables, and receivables and payables in kind, among other) reconciliation is presented in the columns headed “Non-financial assets” and “Non-financial Liabilities”.

Financial Assets


	2017
	Financial Assets at amortized cost		Financial Assets at fair value through profit or loss		Subtotal Financial Assets		Non-financial Assets		Total
Other receivables⁽¹⁾		6,793		—		6,793		7,541		14,334
Trade receivables⁽²⁾		44,182		—		44,182		—		44,182
Investment in financial assets		—		12,936		12,936		—		12,936
Cash and cash equivalents		9,687		19,051		28,738		—		28,738

		60,662		31,987		92,649		7,541		100,190


	2016
	Financial Assets at amortized cost		Financial Assets at fair value through profit or loss		Subtotal Financial Assets		Non-financial Assets		Total
Other receivables⁽¹⁾		8,277		—		8,277		9,145		17,422
Trade receivables⁽²⁾		34,816		—		34,816		—		34,816
Investment in financial assets		—		15,285		15,285		—		15,285
Cash and cash equivalents		7,949		2,808		10,757		—		10,757

		51,042		18,093		69,135		9,145		78,280


	2015
	Financial Assets at amortized cost		Financial Assets at fair value through profit or loss		Subtotal Financial Assets		Non-financial Assets		Total
Other receivables⁽¹⁾		6,392		—		6,392		15,574		21,966
Trade receivables⁽²⁾		23,428		—		23,428		—		23,428
Investment in financial assets		—		804		804		—		804
Cash and cash equivalents		14,613		774		15,387		—		15,387

		44,433		1,578		46,011		15,574		61,585

(1)	Does not include the provision for other doubtful receivables.

(2)	Does not include the provision for doubtful trade receivables.

On May 20, 2016, Decree No. 704/2016 was published, whereby the debt was converted into pesos under the Stimulus Plan for Surplus Natural Gas Injection, the Stimulus Plan for Natural Gas Injection Program for Companies with Reduced Injection and those derived from the Supply of Propane Gas for Undiluted Propane Gas Distribution Networks Agreement at the exchange rate in force at the end of each period, and Argentine National Bonds were granted in US dollars at an interest rate of 8% per annum maturing in 2020 (“BONAR 2020 US$”) for the cancellation thereof.

The sale of these BONAR 2020 US$ was restricted according to the letters of accession; therefore, until and including December 2017, the Group could not sell on a monthly basis more than 3% of the aggregate amount of the BONAR 2020 US$ received. In addition, during the months in which the Group did not exercise its right to sell the BONAR 2020 US$ up to the above-mentioned percentage, it could accumulate the unused percentage for its sale in subsequent months. In no event could the sale in a single month of the accrued balances exceed 12% of the total BONAR 2020 US$ received.

In order to request the cancellation of outstanding payments, beneficiaries had to sign letters of accession and submit to the Hydrocarbon Resources Secretariat of the MINEM. YPF filed the letters of accession and reserved the right to claim the exchange differences and interest.

On July 13, 2016, the Group received, under the Natural Gas Additional Injection Stimulus Program, BONAR 2020 US$, with a face value of US$ 630 million. In addition, on September 21, 2016, under the Supply of Propane Gas for Undiluted Propane Gas Distribution Networks Agreement, the Group received BONAR 2020 US$, with a face value of US$ 12 million.

Financial Liabilities


	2017
	Financial Liabilities at amortized cost		Financial liabilities at fair value through profit or loss		Subtotal financial liabilities		Non-financial liabilities		Total
Loans		191,063		—		191,063		—		191,063
Other liabilities		2,660		—		2,660		—		2,660
Accounts payable		45,773		—		45,773		3,253		49,026

		239,496		—		239,496		3,253		242,749


	2016
	Financial Liabilities at amortized cost		Financial liabilities at fair value through profit or loss		Subtotal financial liabilities		Non-financial liabilities		Total
Loans		154,345		—		154,345		—		154,345
Other liabilities		4,726		—		4,726		—		4,726
Accounts payable		43,287		—		43,287		495		43,782

		202,358		—		202,358		495		202,853


	2015
	Financial Liabilities at amortized cost		Financial liabilities at fair value through profit or loss		Subtotal financial liabilities		Non-financial liabilities		Total
Loans		105,751		—		105,751		—		105,751
Other liabilities		752		—		752		1		753
Accounts payable		39,376		—		39,376		475		39,851

		145,879		—		145,879		476		146,355

Gains and losses on financial instruments are allocated to the following categories:


	2017
	Financial and non- financial Assets / Liabilities at amortized cost			Financial Assets / Liabilities at fair value through profit or loss		Total
Interest income		1,598			—		1,598
Interest loss		(18,385	)		—		(18,385	)
Financial accretion		(3,169	)		—		(3,169	)
Net exchange differences		8,950			—		8,950
Fair value gains on financial assets at fair value through profit or loss		—			2,208		2,208
Gains on derivative financial instruments		—			—		—

		(11,006	)		2,208		(8,798	)


	2016
	Financial and non- financial Assets / Liabilities at amortized cost			Financial Assets / Liabilities at fair value through profit or loss		Total
Interest income		1,472			—		1,472
Interest loss		(18,109	)		—		(18,109	)
Financial accretion		(3,159	)		—		(3,159	)
Net exchange differences		11,611			—		11,611
Fair value gains on financial assets at fair value through profit or loss		—			1,826		1,826
Gains on derivative financial instruments		—			213		213

		(8,185	)		2,039		(6,146	)


	2015
	Financial and non- financial Assets / Liabilities at amortized cost			Financial Assets / Liabilities at fair value through profit or loss		Total
Interest income		1,638			—		1,638
Interest loss		(8,618	)		—		(8,618	)
Financial accretion		(1,987	)		—		(1,987	)
Net exchange differences		20,214			—		20,214
Fair value gains on financial assets at fair value through profit or loss		—			446		446
Gains on derivative financial instruments		—			464		464

		11,247			910		12,157

Fair value measurements

IFRS 9 defines the fair value of a financial instrument as the amount for which an asset could be exchanged, or a financial liability settled, between knowledgeable, independent parties in an arm’s length transaction. All financial instruments recognized at fair value are allocated to one of the valuation hierarchy levels of IFRS 7. This valuation hierarchy provides for three levels.

In the case of Level 1, valuation is based on unadjusted quoted prices in active markets for identical financial assets or liabilities that the Group can refer to at the end of the period. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. Financial instruments assigned by the Group to this level comprise investments in listed mutual funds and public securities.

In the case of Level 2, fair value is determined by using valuation methods based on inputs directly or indirectly observable in the market. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. The Group has not valued financial instruments under this category.

In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group has not valued financial instruments under this category.

YPF’s Corporative Finance Division has a team in place in charge of estimating valuation of financial instruments required to be reported in the financial statements, including the fair value of Level 3 instruments. The team directly reports to the Chief Financial Officer (“CFO”). The CFO and the valuation team discuss the valuation methods and results upon the acquisition of a financial instrument and, if necessary, on a quarterly basis, in line with the Group’s quarterly reports.

The tables below show the Group’s financial assets measured at fair value as of December 31, 2017, 2016 and 2015 and their allocation to their fair value levels.


	2017
Financial Assets	Level 1			Level 2		Level 3		Total
Investment in financial assets:
- Public securities		12,936	⁽¹⁾		—		—		12,936

		12,936			—		—		12,936

Cash and cash equivalents:
- Mutual funds		19,051			—		—		19,051

		19,051			—		—		19,051

		31,987			—		—		31,987


	2016
Financial Assets	Level 1			Level 2		Level 3		Total
Investments in financial assets:
- Mutual funds		53			—		—		53
- Public securities		15,232	⁽¹⁾		—		—		15,232

		15,285			—		—		15,285

Cash and cash equivalents:
- Mutual funds		2,808			—		—		2,808

		2,808			—		—		2,808

		18,093			—		—		18,093


	2015
Financial Assets	Level 1			Level 2		Level 3		Total
Investments in financial assets:
- Mutual funds		340			—		—		340
- Other financial assets		464			—		—		464

		804			—		—		804

Cash and cash equivalents:
- Mutual funds		774			—		—		774

		774			—		—		774

		1,578			—		—		1,578

(1)	As of December 31, 2017, it has been classified as Current. As of December 31, 2016, 7,737 have been classified as Noncurrent and 7,495 has been classified as Current.

The Group has no financial liabilities measured at fair value through profit or loss.

The Group’s policy is to acknowledge transfers among the several categories of valuation hierarchies when occurred, or when there are changes in the prevailing circumstances requiring such transfer. During the years ended December 31, 2017, 2016 and 2015, there were no transfers between the different hierarchies used to determine the fair value of the Group’s financial instruments.

Fair value of financial assets and financial liabilities measured at amortized cost

The estimated fair value of loans, considering unadjusted listed prices (Level 1) for Negotiable Obligations and interest rates offered to the Group (Level 3) for the other financial loans remaining, amounted to 200,264, 157,133 and 106,336 as of December 31, 2017, 2016 and 2015, respectively.

The fair value of other receivables, trade receivables, cash and cash equivalents, accounts payable and other liabilities do not differ significantly from their book value.