Notes to the financial statements
22. Derivatives and hedge accounting continued
2023 $M
2022 $M
AMOUNT AFTER APPLYING RIGHTS OF OFFSET UNDER ISDA AGREEMENTS
AMOUNT AFTER APPLYING RIGHTS OF OFFSET UNDER ISDA AGREEMENTS
DERIVATIVES POSITION AS PER BALANCE SHEET
DERIVATIVES POSITION AS PER BALANCE SHEET
112.1
45.0
Derivative assets Derivative liabilities
164.3
64.4
(160.8)
(93.7) (48.7)
(130.9)
(31.0)
Net amount
(48.7)
33.4
33.4
Rights to offset
Vector enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master agreements. The ISDA agreements do not meet the criteria for offsetting in the balance sheet for accounting purposes. This is because Vector does not have any currently legally enforceable right to offset recognised amounts. Under the ISDA agreements the right to offset is enforceable only on the occurrence of future events such as a default on the bank loans or other credit events. The potential net impact of this offsetting is disclosed in column ‘amount after applying rights of offset under ISDA agreements. Vector does not hold and is not required to post collateral against its derivative positions. The group has no derivative that has been affected by the interbank offered rates (“IBOR”) reform as at 30 June 2023. However, the financial modelling of the fair values for cross currency interest rate swaps and certain hedge relationships will shift from applying USD LIBOR to an alternative benchmark interest rate when the transition happens on 1 July 2023. No significant impact is expected from the transition.
Managing interest rate benchmark reform
93
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