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Risk management and financial instruments (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Notional Amount, Fixed Interest Rate Payable

Below is a summary of the notional amount, fixed interest rate payable and duration of the outstanding principal as at June 30, 2018.

Variable interest entity

Outstanding principal as at June 30, 2018 (In $ millions)

Receive rate

Pay rates

Length of contracts

SFL Linus Limited (West Linus)

141

1—3 month LIBOR

1.77—2.01

%

Dec 2013—Dec 2018

Realized and Unrealized Gains and Losses

The total realized and unrealized gains and losses recognized in the Consolidated Statement of Operations relating to above derivative arrangements for the six months ended June 30, 2018 and 2017 are as follows:

(In $ millions)		Six Months Ended June 30,
(Losses)/Gains recognized in the consolidated statement of operations relating to derivative financial instruments			2018				2017
Interest rate swap agreements not qualified as hedge accounting			(1	)			(18	)
Cross currency interest rate swaps not qualified as hedge accounting			—				29
Foreign currency spot trades not qualified as hedge accounting			—				1
Convertible loan agreement			4				(5	)
Interest rate cap			(7	)			—
(Loss)/Gain on derivative financial instruments			(4	)			7

Carrying Value and Estimated at Fair Value of Financial Instruments

The carrying value and estimated fair value of our financial instruments as at June 30, 2018 and December 31, 2017 were as follows

Financial assets

		As at June 30, 2018								As at December 31, 2017
(In $ millions)		Fair value				Carrying value				Fair value				Carrying value
Cash and cash equivalents			809				809				1,255				1,255
Restricted cash			409				409				104				104
Derivative Asset—interest rate cap			61				61				—				—
Related party loans receivable—short term			18				18				25				25
Related party loans receivable—long term			547				535				522				515

Financial Instruments Measured at Fair Value on a Recurring Basis

Financial assets that are measured at fair value on a recurring basis:

						Fair value measurements as at the reporting date using
(In $ millions)		Total fair value As at June 30, 2018				Quoted prices in active markets for identical assets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Assets:
Marketable securities - current asset			121				121				—				—
Interest rate cap – current asset			61				—				61				—
Convertible debt instruments - non-current asset			58				—				—				58
Total assets			240				121				61				58
						Fair value measurements as at the reporting date using
(In $ millions)		Total fair value As at December 31, 2017				Quoted prices in active markets for identical assets (Level 1)				Significant other observable inputs (Level 2)				Significant unobservable inputs (Level 3)
Assets:
Marketable securities - current asset			124				124				—				—
Convertible debt instrument - non-current asset			52				—				—				52
Total assets			176				124				—				52

Reconciliation of Convertible Debt Instrument Classified Within Level 3

The following table is a reconciliation of the convertible debt instrument classified within Level 3 of the valuation hierarchy for the periods indicated:

(In $ millions)		Total fair value (Level 3)
As at December 31, 2017			52
Change in fair valued recognized in the Statement of Operations			4
Change in fair value recognized in Other Comprehensive Income			2
As at June 30, 2018			58

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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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-Publisher FASB
-Name Accounting Standards Codification
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Tabular disclosure of the fair value measurement of financial instruments classified in shareholders' equity using significant unobservable inputs (level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of level 3 (for example, transfers due to changes in the observability of significant inputs) by class of equity.

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-Publisher FASB
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Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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Tabular disclosure for other derivative instruments not designated as hedging instruments of (a) the location and amount of gains and losses reported in the statement of financial performance and (b) the location and fair value amounts of the instruments reported in the statement of financial position.

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