NOTES TO THE FINANCIAL STATEMENTS continued
19. Derivatives and hedge accounting:// CONTINUED 19.2 Reconciliation of changes in hedge reserves
CASHFLOW HEDGE RESERVE $M
COST OF HEDGING $M
Hedge reserves 2018 Opening balance
TOTAL $M
47.2 33.2
1.8
49.0 31.8
Hedging gains or losses recognised in OCI
(1.4)
Transferred to profit or loss
(44.4)
– –
(44.4)
Recognised as basis adjustment to non-financial assets
0.2 3.1
0.2 3.5
Deferred tax on change in reserves
0.4 0.8
Closing balance
39.3
40.1
CASHFLOW HEDGE RESERVE $M
COST OF HEDGING $M
Hedge reserves 2017 Opening balance
TOTAL $M
89.0
0.4 2.0
89.4
Hedging gains or losses recognised in OCI
1.6
3.6
Transferred to profit or loss
(59.5)
– –
(59.5)
Recognised as basis adjustment to non-financial assets
(0.1)
(0.1)
Deferred tax on change in reserves
16.2 47.2
(0.6)
15.6 49.0
Closing balance
1.8
20. Financial risk management:// Policies
Fair value measurement hierarchy Financial instruments measured at fair value are classified according to the following levels: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; or Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); or Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Risk management framework Vector has a comprehensive treasury policy, approved by the board of directors, to manage financial risks arising from business activity. The policy outlines the objectives and approach that the group applies to manage: —— Interest rate risk; —— Credit risk; —— Liquidity risk; —— Foreign exchange risk; and —— Funding risk. For each risk type, any position outside the policy limits requires the prior approval of the board of directors. Each risk is monitored on a regular basis and reported to the board.
99
Vector://AR 18
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