This excerpt taken from the GXP 10-K filed Mar 7, 2005.
Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value.
Nonutility Property and Investments Consolidated KCP&L's investments and nonutility property includes the nuclear decommissioning trust fund recorded at fair value. Fair value is based on quoted market prices of the investments held by the fund. In addition to consolidated KCP&Ls investments, Great Plains Energys investments and nonutility property include KLT Investments Inc.s (KLT Investments) affordable housing limited partnerships. The fair value of KLT Investments' affordable housing limited partnership total portfolio, based on the discounted cash flows generated by tax credits, tax deductions and sale of properties, approximates book value. The fair values of other various investments are not readily determinable and the investments are therefore stated at cost.
Long-term Debt The incremental borrowing rate for similar debt was used to determine fair value if quoted market prices were not available. Great Plains Energys and consolidated KCP&Ls book values of long-term debt were between 3% and 4% below fair values at December 31, 2004.