This excerpt taken from the BP 20-F filed Mar 4, 2008.
The estimated fair value of finance debt is shown in the table below together with the carrying amount as reflected in the balance sheet.
Long-term borrowings in the table below include the portion of debt that matures in the year from 31 December 2007, whereas in the balance sheet the amount would be reported as current liabilities.
The carrying amount of the groups short-term borrowings, comprising mainly commercial paper, bank loans, overdrafts and US Industrial Revenue/ Municipal Bonds, approximates their fair value. The fair value of the groups long-term borrowings and finance lease obligations is estimated using quoted prices or, where these are not available, discounted cash flow analyses based on the groups current incremental borrowing rates for similar types and maturities of borrowing.
This excerpt taken from the BP 6-K filed Mar 13, 2006.
Fair values The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date. Where there is no active market, fair value is determined using valuation techniques. These include using recent arms-length market transactions; reference to the current market value of another instrument which is substantially the same; discounted cash flow analysis; and pricing models. Otherwise assets are carried at cost.