✨ Financial Statements Notes
NEW ZEALAND GAZETTE
No. 162
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2006
29. FINANCIAL INSTRUMENTS (cont...)
(d) Maximum credit risk exposure
The maximum credit exposure to which Transpower is subject is best measured by the cash settlement amount receivable from the Counterparty. This is represented by the principal amount receivable for cross currency interest rate swaps and foreign exchange forward contracts, the net interest receivable/payable for interest rate swaps and the market value of interest rate options, foreign currency options and forward rate agreements.
Where the net interest accrued on interest rate swaps represents a payable and the current market value of interest rate options, foreign currency options and forward rate agreements represents a loss, Transpower is not subject to credit risk on these instruments at balance date.
| LINES BUSINESS 2006 | LINES BUSINESS 1999 | |
|---|---|---|
| $000 | $000 |
Cash settlement is represented by:
Principal amount receivable/(payable)
Cross currency interest rate swaps
- receivable | 911,633 | 781,624 |
- payable | (790,938) | (753,450) |
Foreign exchange forward contracts | 2,459 | 9,442 |
Net interest payable
Interest rate swaps | (3,373) | (4,903) |
Current market value
Interest rate options | (8) | (614) |
Foreign currency options | — | — |
Forward rate agreements | (111) | 2 |
The credit risk arising from cross currency interest rate swap contracts is reduced by the netting and set-off provisions of the swap documentation and the application of applicable law. The Group further manages this risk by only entering into transactions with counterparties that fall within Transpower's credit risk management policy as outlined in section (h) risk management policies of this note.
(e) Carrying value and fair value
Carrying value
For off balance sheet financial instruments the carrying value in the Carrying/Fair Value table below is taken from the other receivables and other liabilities categories in the Statement of Financial Position as appropriate. The carrying values represent the results of accounting for these instruments, as described in the Statement of Accounting Policies.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2000, No 162
Gazette.govt.nz —
NZ Gazette 2000, No 162
✨ LLM interpretation of page content
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Transpower New Zealand Limited Notes to the Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Instruments, Credit Risk, Cash Settlement, Cross Currency Interest Rate Swaps, Foreign Exchange Forward Contracts, Interest Rate Options, Foreign Currency Options, Forward Rate Agreements