Creating a new energy future – a bold vision
21. Derivatives and hedge accounting continued 21.1 Effects of hedge accounting on the financial position and performance continued
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
2020
Cash flow hedge – Interest risk Hedged item: NZD floating rate exposure on borrowings Hedging instrument: Interest rate swaps Cash flow and fair value hedges – Interest and exchange risks Hedged item: USD f ixed rate exposure on borrowings Hedging instrument: Cross currency swaps
(1,280.0)
(106.2)
(1,780.0)
3.4%
(104.5)
(104.5)
26.3
(1,613.4)
(231.1)
(1,839.9)
(31.8)
(143.7)
(1,613.4)
floating
220.1
23.8
140.3
1.4
(0.9)
Ineffectiveness
–
(3.4)
Hedging instruments and hedged items are included in the line items “Derivatives” and “Borrowings” respectively in the balance sheet. Ineffectiveness is the sum of the change in fair value of the hedged item and the change in fair value of the hedging instrument. 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 f inancial instruments” in the prof it or loss. Please refer to the asset and liability positions of the hedging instruments in Note 21 derivatives and hedge accounting table above.
21.2 Fair value changes on financial instruments
2021 $M
2020 $M
NOTE
Recognised in profit or loss Fair value movement on hedging instruments
(184.3)
140.3
186.7
Fair value movement on hedged items
(143.7)
(5.9) (3.5)
Fair value change on contingent consideration
5
–
Total gains/(losses)
(3.4)
81
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