Notes to the financial statements
22. Derivatives and hedge accounting continued 22.1 Effects of hedge accounting on the financial position and performance
CHANGE IN FAIR VALUE USED FOR MEASURING INEFFECTIVE- NESS – CASHFLOW HEDGE $M
CHANGE IN FAIR VALUE USED FOR MEASURING INEFFECTIVE- NESS – FAIR
HEDGING (GAIN) OR LOSS RECOGNISED IN CASH FLOW HEDGE RESERVE $M
ACCUMU- LATED FAIR
(GAIN) OR LOSS RECOGNISED IN COST OF HEDGING $M
VALUE HEDGE ADJUST- MENTS $M
CARRYING AMOUNT ASSETS/ (LIABILITIES) $M
FACE VALUE $M
WEIGHTED AVERAGE RATE
VALUE HEDGE $M
2022
Cash flow hedge - Interest risk Hedged item: NZD floating rate exposure on borrowings (1,230.0)
78.1
Hedging instrument: Fixed rate Interest rate swaps
(1,430.0)
2.3%
77.6
77.6
(111.0)
Cash flow and fair value hedge - Interest and exchange risks Hedged item: USD fixed rate exposure on borrowings (1,463.4)
(1,408.5)
5.7
122.0
Hedging instrument: Cross currency swaps
(1,463.4)
floating
51.4
(45.6)
13.2
(124.1)
(6.6)
8.3
Fair value hedge - Interest risk Hedged item: NZD fixed rate exposure on borrowing (50.0)
(46.9)
2.9
Hedging instrument: Interest rate swap
(50.0)
floating
2.9
(2.9)
(2.9) (2.1)
Ineffectiveness
7.5
Hedging instruments and hedged items are included in the line items “Derivatives” and “Borrowings” respectively in the balance sheet. The source of ineffectiveness is largely due to counterparty credit risk on the derivative instruments. Hedge ineffectiveness is included in the “Fair value change on financial instruments” in the profit or loss. Please refer to the asset and liability positions of the hedging instruments in Note 22 derivatives and hedge accounting table above.
22.2 Fair value changes on financial instruments
2023 $M
2022 $M
NOTE
Recognised in profit or loss Fair value movement on hedging instruments Fair value movement on hedged items Fair value movement on unhedged items Ineffectiveness from cash flow hedge relationships Fair value change on contingent consideration
(90.4)
(127.0)
90.9
124.9
(0.5) (2.5)
0.5 7.5
(10.7) (13.2)
5
(2.3)
Total gains/(losses)
3.6
95
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