NOTES TO THE FINANCIAL STATEMENTS continued
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
Cash flow hedges 2018
FACE VALUE $M
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
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
Cash flow hedges 2017
FACE VALUE $M
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
(1,000.0)
(52.8)
(1,420.0)
5.0%
(51.9)
(51.9)
51.9
–
–
(285.6)
(96.3)
(285.6)
10.8%
(94.0)
(94.7)
13.4 Total
– –
(0.7)
The NZD floating rate exposure includes $350.0 million from the floating rate notes (2017: $750.0 million) and $440.0 million arising from hedging the USD senior bonds (2017: $250.0 million), as allowable under NZ IFRS 9. The interest rate swaps include $310.0 million of forward starting swaps (2017: $420.0 million).
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Vector://AR 18
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