✨ Financial Statements Notes
NEW ZEALAND GAZETTE
No. 162
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
NOTES TO THE FINANCIAL STATEMENTS continued
FOR THE YEAR ENDED 30 JUNE 2003
20. FINANCIAL INSTRUMENTS continued
(d) Maximum credit risk exposure
The maximum credit exposure to which Transpower is subject is best measured by the net cash settlement amount receivable from the counterparty for cross currency interest rate swaps, foreign exchange forward contracts, 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 or 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 2003 $000 | LINES BUSINESS 2002 $000 | |
|---|---|---|
| Net cash settlement amount receivable | ||
| Cross currency interest rate swaps | 4,341 | 70,801 |
| Interest rate swaps | 7,095 | 3,979 |
| Current market value | ||
| Forward rate agreements | - | 2 |
The credit risk arising from the use of derivative products is minimised by the netting and set-off provisions of the 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. The unrealised foreign currency gains and losses on cross currency interest rate swaps are included in the carrying value of debt.
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Online Sources for this page:
VUW Te Waharoa —
NZ Gazette 2003, No 162
Gazette.govt.nz —
NZ Gazette 2003, No 162
✨ LLM interpretation of page content
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Transpower New Zealand Limited Lines Business Notes to the Financial Statements
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial statements, Financial instruments, Interest rate swaps, Cross currency interest rate swaps, Forward rate agreements, Interest rate options, Foreign exchange forward contracts, Credit risk exposure, Carrying value, Fair value