25. Derivative Financial Instruments  |  continued Fair value hierarchy During the reporting periods ending 31 December 2012 and 31 December 2011 there were no transfers between Level 1 and Level 2 fair value measurements, and  no transfers into and out of Level 3 fair value measurements. Fair value hedges consist of interest rate swaps and currency swaps. These instruments hedge risks arising from changes in asset/liability fair values due to interest  rate and foreign exchange rate movements. Cash flow hedges consist of forward foreign exchange and commodity contracts and interest rate and currency swaps. These instruments hedge risks arising to  future cash flows from movements in foreign exchange rates, commodity prices and interest rates. Cash flow hedges are expected to affect profit and loss over the  period to maturity.  Net investment hedges comprise cross-currency swaps and hedge changes in the value of net investments due to currency movements. The profit/(loss) arising on fair value, cash flow, net investment hedges and related hedged items reflected in the Consolidated Income Statement is shown below: Components of other comprehensive income - cash flow hedges Losses arising during the year: Commodity forward contracts  - (4) Interest rate swaps  - (1) Reclassification adjustments for losses/(gains) included in: - the Consolidated Income Statement  1  (2) Total  1  (7) 2012 2011 €m €m Cash flow hedges - ineffectiveness (3)  2  Fair value of hedge instruments (16)  12  Fair value of the hedged items  21  (17) The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows: – Level 1: quoted prices (unadjusted) in 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 (i.e. as prices) or indirectly (i.e. derived from  prices) – Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs) As at 31 December 2012 As at 31 December 2011 Level 1 Level 2 Total Level 1 Level 2 Total  €m   €m   €m   €m   €m   €m  Assets measured at fair value Fair value hedges - cross currency and interest rate swaps  -  168   168   -  187   187  Cash flow hedges  -  -  -  -  1   1  Net investment hedges - cross currency swaps  -  4   4   -  12   12  Not designated as hedges (held-for-trading) - interest rate swaps  -  -  -  -  5   5  Held-for-trading (fair value through profit or loss)  31   -  31   28   -  28  Total  31   172   203   28   205   233  Liabilities measured at fair value Cash flow hedges - cross currency and interest rate swaps  - (15) (15)  - (22) (22) Net investment hedges - cross currency swaps  - (5) (5)  - (8) (8) Total  - (20) (20)  - (30) (30) 106 CRH