NOTES TO THE FINANCIAL STATEMENTS
21. Derivatives and hedge accounting:// CONTINUED 21.2 Reconciliation of changes in hedge reserves
CASHFLOW HEDGE RESERVE $000
COST OF HEDGING $000
Hedge reserves 2017 Opening balance
TOTAL $000
88,883
395
89,278
Hedging gains or losses recognised in OCI
1,640
2,011
3,651
Transferred to profit or loss
(59,469)
– –
(59,469)
Recognised as basis adjustment to non-financial assets
(127)
(127)
Deferred tax on change in reserves
16,228 47,155
(563)
15,665 48,998
Closing balance
1,843
CASH FLOW HEDGE RESERVE $000
COST OF HEDGING $000
Hedge reserves 2016 Opening balance
TOTAL $000
74,065 71,708 (50,194)
(472)
73,593 72,912 (50,194)
Hedging gains or losses recognised in OCI
1,204
Transferred to profit or loss
– –
Recognised as basis adjustment to non-financial assets
(934)
(934)
Deferred tax on change in reserves
(5,762) 88,883
(337)
(6,099) 89,278
Closing balance
395
22. Financial risk management:// Policies
Fair value measurement hierarchy Financial instruments measured at fair value are classified according to the following levels: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; or Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); or Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Risk management framework Vector has a comprehensive treasury policy, approved by the board of directors, to manage financial risks arising from business activity. The policy outlines the objectives and approach that the group applies to manage: —— Interest rate risk; —— Credit risk; —— Liquidity risk; —— Foreign exchange risk; and —— Funding risk. For each risk type, any position outside the policy limits requires the prior approval of the board of directors. Each risk is monitored on a regular basis and reported to the board.
108
Vector://AR 17
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