19. Derivatives and hedge accounting CONTINUED 19.1 Effects of hedge accounting on the financial position and performance The tables below demonstrate the impact of hedged items and the hedging instruments designated in hedging relationships:
HEDGING (GAIN) OR LOSS RECOGNISED IN CASH FLOW HEDGE RESERVE $M
CHANGE IN FAIR VALUE USED FOR MEASURING INEFFECTIVE NESS $M
HEDGE INEFFECTIVE NESS RECOGNISED IN PROFIT OR LOSS $M
(GAIN) OR LOSS RECOGNISED IN COST OF HEDGING $M
CARRYING AMOUNT ASSETS/ (LIABILITIES) $M
WEIGHTED AVERAGE RATE $M
FACE VALUE $M
Cash flow hedges 2019
Interest risk Hedged item: NZD floating rate exposure on borrowings Hedging instrument: Interest rate swaps
(1,070.0)
(80.1)
(1,450.0)
3.8%
(78.2)
(78.2)
78.2 Total
– –
–
HEDGING (GAIN) OR LOSS RECOGNISED IN CASH FLOW HEDGE RESERVE $M
CHANGE IN FAIR VALUE USED FOR MEASURING INEFFECTIVE NESS $M
HEDGE INEFFECTIVE NESS RECOGNISED IN PROFIT OR LOSS $M
(GAIN) OR LOSS RECOGNISED IN COST OF HEDGING $M
CARRYING AMOUNT ASSETS/ (LIABILITIES) $M
WEIGHTED AVERAGE RATE $M
FACE VALUE $M
Cash flow hedges 2018
Interest risk Hedged item: NZD floating rate exposure on borrowings Hedging instrument: Interest rate swaps Interest and exchange risk Hedged item: GBP fixed rate exposure on borrowings Hedging instrument: Cross currency swaps
(790.0)
(49.0)
(1,100.0)
4.2%
(49.6)
(49.6)
49.6
–
–
(285.6)
(66.2)
(285.6)
10.8%
(65.6)
(65.9)
4.8
– –
(0.3)
Total
The NZD floating rate exposure includes $350.0 million from the floating rate notes (2018: $350.0 million) and $720.0 million arising from hedging the USD senior bonds (2018: $440.0 million), as allowable under NZ IFRS 9. The interest rate swaps include $380.0 million of forward starting swaps (2018: $310.0 million).
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