Notes to the financial statements
22. Fair values of financial assets and liabilities
The fair value and carrying value of the financial assets and liabilities of the Group are set out below:
| 2008 | 2007 | ||||
|---|---|---|---|---|---|
| Group | Fair value £m |
Carrying value £m |
Fair value £m |
Carrying value £m |
|
| Financial assets | |||||
| Cash and cash equivalents | 62.2 | 62.2 | 88.8 | 88.8 | |
| Amounts receivable from customers | 800.0 | 574.4 | 600.0 | 443.2 | |
| Derivative financial instruments | 1.7 | 1.7 | 0.7 | 0.7 | |
| Trade and other receivables | 19.2 | 19.2 | 9.0 | 9.0 | |
| 883.1 | 657.5 | 698.5 | 541.7 | ||
Financial liabilities |
|||||
| Bank borrowings | 434.3 | 434.3 | 370.8 | 370.8 | |
| Trade and other payables | 53.4 | 53.4 | 50.6 | 50.6 | |
| Derivative financial instruments | 14.4 | 14.4 | 0.7 | 0.7 | |
| Current tax liabilities | 2.5 | 2.5 | 5.0 | 5.0 | |
| 504.6 | 504.6 | 427.1 | 427.1 | ||
The fair value of amounts receivable from customers has been derived by discounting expected future cash flows (net of collection costs) at an appropriate discount rate.
The carrying value of borrowings is deemed to be a good approximation of the fair value. Borrowings can be repaid within six months if the Group decides not to rollover for further periods up to the contractual repayment date. The impact of discounting would therefore be negligible.
Derivative financial instruments are held at fair value which is equal to the expected future cash flows arising as a result of the derivative transaction.
For other financial assets and liabilities, which are all short-term in nature, the carrying value is a reasonable approximation of fair value.