XML 132 R32.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Financial instruments: fair value measurement and sensitivity analysis of market risk | 12 Months Ended
--- | ---
Dec. 31, 2021
Disclosure of Financial instruments: fair value measurement and sensitivity analysis of market risk [abstract] |
Disclosure of Financial instruments: fair value measurement and sensitivity analysis of market risk [text block] | 26 Financial instruments: fair value measurement and sensitivity analysis of market risk Financial instruments by category The following tables present Equinor's classes of financial instruments and their carrying amounts by the categories as they are defined in IFRS 9 Financial Instruments: Classification and Measurement. For financial investments, the difference between measurement as defined by IFRS 9 categories and measurement at fair value is immaterial. For trade and other receivables and payables, and cash and cash equivalents, the carrying amounts are considered a reasonable approximation of fair value. See note 19 Finance debt for fair value information of non-current bonds and bank loans. See note 2 Significant accounting policies for further information regarding measurement of fair values. At 31 December 2021 Fair value through profit or loss Non-financial assets Total carrying amount (in USD million) Note Amortised cost Assets Non-current derivative financial instruments 1,265 1,265 Non-current financial investments 14 253 3,093 3,346 Prepayments and financial receivables 14 707 380 1,087 Trade and other receivables 16 17,192 736 17,927 Current derivative financial instruments 5,131 5,131 Current financial investments 14 20,946 300 21,246 Cash and cash equivalents 17 11,412 2,714 14,126 Total financial assets 50,510 12,503 1,116 64,128 At 31 December 2020 Fair value through profit or loss Non-financial assets Total carrying amount (in USD million) Note Amortised cost Assets Non-current derivative financial instruments 2,476 2,476 Non-current financial investments 14 261 3,822 4,083 Prepayments and financial receivables 1) 14 465 396 861 Trade and other receivables 16 7,418 814 8,232 Current derivative financial instruments 886 886 Current financial investments 14 11,649 216 11,865 Cash and cash equivalents 17 6,264 492 6,757 Total financial assets 26,057 7,892 1,210 35,159 1) The categories Amortised cost and Non-financial assets has been reclassified under Prepayments and financial receivables, due to an incorrect classification of USD 32 million in 2020. At 31 December 2021 Amortised cost Fair value through profit or loss Non-financial liabilities Total carrying amount (in USD million) Note Liabilities Non-current finance debt 19 27,404 27,404 Non-current derivative financial instruments 767 767 Trade, other payables and provisions 22 12,350 1,960 14,310 Current finance debt 19 5,273 5,273 Dividend payable 582 582 Current derivative financial instruments 4,609 4,609 Total financial liabilities 45,609 5,376 1,960 52,945 At 31 December 2020 Amortised cost Fair value through profit or loss Non-financial liabilities Total carrying amount (in USD million) Note Liabilities Non-current finance debt 19 29,118 29,118 Non-current derivative financial instruments 676 676 Trade, other payables and provisions 22 7,736 2,774 10,510 Current finance debt 19 4,591 4,591 Dividend payable 357 357 Current derivative financial instruments 1,710 1,710 Total financial liabilities 41,802 2,386 2,774 46,961 Fair value hierarchy The following table summarises each class of financial instruments which are recognised in the Consolidated balance sheet at fair value, split by Equinor's basis for fair value measurement. (in USD million) Non-current financial investments Non-current derivative financial instruments - assets Current financial investments Current derivative financial instruments - assets Cash equivalents Non-current derivative financial instruments - liabilities Current derivative financial instruments - liabilities Net fair value At 31 December 2021 Level 1 860 0 - 949 0 (69) 1,740 Level 2 1,840 884 300 4,108 2,714 (762) (4,539) 4,545 Level 3 393 380 74 (4) 843 Total fair value 3,093 1,265 300 5,131 2,714 (767) (4,609) 7,127 At 31 December 2020 Level 1 1,379 - 66 419 - (432) 1,432 Level 2 2,135 2,146 150 443 492 (671) (1,277) 3,418 Level 3 308 330 24 (5) 657 Total fair value 3,822 2,476 216 886 492 (676) (1,710) 5,505 Level 1, fair value based on prices quoted in an active market for identical assets or liabilities, includes financial instruments actively traded and for which the values recognised in the Consolidated balance sheet are determined based on observable prices on identical instruments. For Equinor this category will, in most cases, only be relevant for investments in listed equity securities and government bonds. Level 2, fair value based on inputs other than quoted prices included within level 1, which are derived from observable market transactions, includes Equinor's non-standardised contracts for which fair values are determined on the basis of price inputs from observable market transactions. This will typically be when Equinor uses forward prices on crude oil, natural gas, interest rates and foreign currency exchange rates as inputs to the valuation models to determine the fair value of it derivative financial instruments. Level 3, fair value based on unobservable inputs, includes financial instruments for which fair values are determined on the basis of input and assumptions that are not from observable market transactions. The fair values presented in this category are mainly based on internal assumptions. The internal assumptions are only used in the absence of quoted prices from an active market or other observable price inputs for the financial instruments subject to the valuation. The fair value of certain earn-out agreements and embedded derivative contracts are determined by the use of valuation techniques with price inputs from observable market transactions as well as internally generated price assumptions and volume profiles. The discount rate used in the valuation is a risk-free rate based on the applicable currency and time horizon of the underlying cash flows adjusted for a credit premium to reflect either Equinor's credit premium, if the value is a liability, or an estimated counterparty credit premium if the value is an asset. In addition, a risk premium for risk elements not adjusted for in the cash flow may be included when applicable. The fair values of these derivative financial instruments have been classified in their entirety in the third category within current derivative financial instruments and non-current derivative financial instruments. Another reasonable assumption, that could have been applied when determining the fair value of these contracts, would be to extrapolate the last relevant forward prices with inflation. If Equinor had applied this assumption, the fair value of the contracts included would have increased by approximately USD 0.4 billion at end of 2021, while at end of 2020 the impact was approximately USD 0.1 billion. The reconciliation of the changes in fair value during 2021 and 2020 for financial instruments classified as level 3 in the hierarchy is presented in the following table. (in USD million) Non-current financial investments Non-current derivative financial instruments - assets Current derivative financial instruments - assets Non-current derivative financial instruments - liabilities Total amount Opening at 1 January 2021 308 330 24 (5) 657 Total gains and losses recognised in statement of income (23) 58 72 1 108 Purchases 119 119 Settlement (7) (20) (27) Transfer out of level 3 - - Foreign currency translation effects (3) (8) (2) (13) Closing at 31 December 2021 394 380 74 (4) 844 Opening at 1 January 2020 277 219 33 (19) 510 Total gains and losses recognised in statement of income (29) 106 19 14 109 Purchases 64 64 Settlement (8) (28) (36) Transfer to level 1 1 1 Foreign currency translation effects 4 5 - 9 Closing at 31 December 2020 308 330 24 (5) 657 During 2021 the financial instruments within level 3 have had a net increase in fair value of USD 187 million whereof non-current financial investments contributed with USD 86 million. The USD 108 million recognised in the Consolidated statement of income during 2021 are mainly related to changes in fair value of certain earn-out agreements where USD 20 million included in the opening balance for 2021 has been fully realised as the underlying volumes have been delivered during 2021. Sensitivity analysis of market risk Commodity price risk The table below contains the commodity price risk sensitivities of Equinor's commodity based derivatives contracts. For further information related to the type of commodity risks and how Equinor manages these risks, see note 6 Financial risk and capital management. Equinor's assets and liabilities resulting from commodity based derivatives contracts consist of both exchange traded and non- exchange traded instruments, including embedded derivatives that have been bifurcated and recognised at fair value in the Consolidated balance sheet. Price risk sensitivities at the end of 2021 and 2020 at 30 % are assumed to represent a reasonably possible change based on the duration of the derivatives. Since none of the derivative financial instruments included in the table below are part of hedging relationships, any changes in the fair value would be recognised in the Consolidated statement of income. Commodity price sensitivity At 31 December 2021 2020 (in USD million) - 30% + 30% - 30% + 30% Crude oil and refined products net gains/(losses) 735 (735) 1,025 (1,025) Natural gas, electricity and CO2 net gains/(losses) 227 (141) 184 (94) Currency risk The following currency risk sensitivity has been calculated, by assuming an 10% reasonable possible change in the most relevant foreign currency exchange rates that impact Equinor’s financial accounts, based on balances at 31 December 2021. As of 31 December 2020, a change of 8% in the most relevant foreign currency exchange rates were viewed as a reasonable possible change. With reference to table below, an increase in the foreign currency exchange rates means that the disclosed currency has strengthened in value against all other currencies. The estimated gains and the estimated losses following from a change in the foreign currency exchange rates would impact the Consolidated statement of income. For further information related to the currency risk and how Equinor manages these risks, see note 6 Financial risk and capital management. Currency risk sensitivity At 31 December 2021 2020 (in USD million) - 10 % + 10% - 8 % + 8% USD net gains/(losses) (1,789) 1,789 (319) 319 NOK net gains/(losses) 2,144 (2,144) 322 (322) Interest rate risk The following interest rate risk sensitivity has been calculated by assuming a change of 0.8 percentage points as a reasonable possible change in interest rates at the end of 2021. In 2020, a change of 0.6 percentage points in interest rates was viewed as a reasonable possible change. A decrease in interest rates will have an estimated positive impact on net financial items in the Consolidated statement of income, while an increase in interest rates has an estimated negative impact on net financial items in the Consolidated statement of income. For further information related to the interest risks and how Equinor manages these risks, see note 6 Financial risk and capital management. Interest risk sensitivity At 31 December 2021 2020 (in USD million) - 0.8 percentage points + 0.8 percentage points - 0.6 percentage points + 0.6 percentage points Positive/(negative) impact on net financial items 448 (448) 516 (516) Equity price risk The following equity price risk sensitivity has been calculated, by assuming a 35% reasonable possible change in equity prices that impact Equinor’s financial accounts, based on balances at 31 December 2021. Also at 31 December 2020, a change of 35% in equity prices were viewed as a reasonable possible change. The estimated gains and the estimated losses following from a change in equity prices would impact the Consolidated statement of income. For further information related to the equity price risk and how Equinor manages these risks, see note 6 Financial risk and capital management. Equity price sensitivity At 31 December 2021 2020 (in USD million) - 35% + 35% - 35% + 35% Net gains/(losses) (534) 534 (684) 684

X
- References No definition available. + Details
Name: | ifrs-full_DisclosureOfFinancialInstrumentsAbstract
Namespace Prefix: | ifrs-full_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for financial instruments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IFRS -Number 7 -IssueDate 2021-01-01 -Section Scope -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IFRS&num=7&code=ifrs-tx-2021-en-r&doctype=Standard&dita_xref=IFRS07_g3-5A_TI -URIDate 2021-03-24 + Details
Name: | ifrs-full_DisclosureOfFinancialInstrumentsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration