Financial statements
Section B: Notes to the Group financial statements for the year ended 30 June 2024
Section B: Notes to the Group financial statements for the year ended 30 June 2024
B14 Financial risk management and derivatives (continued) Effects of hedge accounting on financial position and performance Hedging reserves The following table presents the gains and losses on the Group’s hedging instruments transferred to and from reserves: 2024
2023
$M
$M
Cash flow
Cash flow
Cost of hedging reserve
Cost of hedging reserve
hedges reserve
hedges reserve
Opening balance as at 1 July
4
(89) (19)
93
8
Change in net fair value of derivatives recognised in hedging reserves in OCI
(36)
195
(6)
Transfers in fair value of hedging instruments from OCI to the profit and loss (net finance costs) for hedge ineffectiveness Transfers in fair value of hedging instruments from OCI to the profit and loss (other expenses) for foreign currency movements¹
(34)
—
38
—
101
—
(491) (258)
—
Net revaluation - gross
48
(36)
(6)
Tax effect on revaluation movements
(15)
11 —
76 —
2
Share of hedging reserves of equity accounted investments, net of tax
(3)
—
Closing balance as at 30 June 4 1. There is no significant impact on the profit and loss from foreign currency movements associated with the borrowings portfolio that are swapped to Australian dollars as an offsetting entry will be recognised on the associated hedging instrument. $101 million represents unrealised losses transferred (2023: $491 million unrealised gains) relating to foreign currency revaluation of the principal component of cross currency interest rate swaps that offsets the unrealised foreign currency revaluation of the principal value of hedged foreign denominated borrowings. Foreign currency translation reserve (59) (21) (89) As at 30 June 2024, the Group has deferred in equity within foreign currency translation reserve $14 million in losses (2023: $44 million in gains) relating to exchange movements on the revaluation of financial instruments hedging a portion of the net assets of the Group's investments in its US and Canadian based assets. During FY24 there were $nil transfers (2023: $7 million loss, net of tax) relating to valuation of hedging instruments transferred from foreign currency translation reserve to the profit and loss following disposal of subsidiary. Borrowings in fair value hedges The table below shows the cumulative amount of fair value hedge adjustments that are included in the carrying amount of borrowings in the balance sheet. 2024 2023 $M $M Principal value 1,614 — Capitalised borrowing costs (10) — Amortised cost 1,604 — Cumulative fair value hedge adjustments (24) — Carrying amount 1,580 — During FY24 the net amount recognised in the profit and loss within finance costs relating to borrowings in fair value hedges was a gain of $24 million (2023: $nil). This was offset by a loss on associated derivative instruments of $37 million (2023: $nil).
152
151
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