✨ Financial Statements
27 NOVEMBER 2009 NEW ZEALAND GAZETTE, No. 172 4169
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
6. Change in fair value of financial instruments
| | LINES BUSINESS |
|-----------------------------------------------|-----------------------|-----------------------|
| | 2009 | 2008 |
| | $'000 | $'000 |
Accounting hedges
Fair value movement forward exchange contracts - hedge accounted | 204 | 3,826 |
Fair value movement hedge commitment | (440) | (3,651) |
Debt and investments
Fair value movement foreign debt | (105,146) | (227,996) |
Fair value movement cross currency interest rate swaps | 128,381 | 218,462 |
Fair value movement interest rate swaps | 15,325 | 4,447 |
Fair value movement basis swaps | 240 | - |
Fair value movement interest rate options | (250) | (112) |
Fair value movement NZD interest rate swaps | (104,279) | (33,926) |
Fair value movement forward exchange contracts - not hedge accounted| (3,037) | - |
Fair value movement investments | 470 | (5,583) |
Fair value movement NZD debt | (7,287) | - |
| (61,009) | (44,708) |
Total fair value gain (loss) | (61,245) | (44,533) |
The above fair value movements are as a result of the Lines Business designating these instruments at fair value through profit or loss or as fair value hedges. Refer to Note 9 Financial Instrument Designation for further information.
Credit Spread Impact
The impact of credit risk on the fair value (gain) loss was a $70m gain in 2009 (nil, 2008). The change is due to the significant increase in credit spreads due to the financial crisis.
Foreign Purchases
The Lines Business hedges against foreign currency fluctuations on certain foreign purchases through the use of forward exchange contracts. The "hedge commitment" represents the non derivative fair value movement on the commitment to buy the goods, i.e. before the goods or an invoice are received. Note that, although all forward exchange contracts are used for reducing currency exposure on foreign purchases, not all forward exchange contracts are hedge accounted.
Debt and Investments
Refer to Note 23 Financial Instruments for information on the use of debt, investments and derivatives.
Next Page →
NZ Gazette 2009, No 172
✨ LLM interpretation of page content
🏭
Transpower New Zealand Limited Change in Fair Value of Financial Instruments
(continued from previous page)
🏭 Trade, Customs & IndustryFinancial Instruments, Fair Value, Accounting Hedges, Debt, Investments, Credit Spread, Foreign Purchases