✨ Financial Statements
NEW ZEALAND GAZETTE, No. 184
28 NOVEMBER 2011
TRANSPOWER NEW ZEALAND LIMITED LINES BUSINESS
6. Change in fair value of financial instruments
| LINES BUSINESS | ||
|---|---|---|
| 2011 | 2010 | |
| $M | $M |
Accounting hedges
Fair value movement forward exchange contracts - hedge accounted | (12.2) | (29.5) |
Fair value movement hedge commitment | 12.3 | 29.8 |
| 0.1 | 0.3 |
Other
Fair value movement foreign debt | 60.2 | 31.3 |
Fair value movement cross currency interest rate swaps | (77.3) | (13.3) |
Fair value movement foreign interest rate swaps | (1.8) | 4.6 |
Fair value movement basis swaps | 1.0 | (0.2) |
Fair value movement interest rate options | --- | 0.4 |
Fair value movement NZD interest rate swaps | (43.0) | (99.3) |
Fair value movement forward exchange contracts - not hedge accounted | 1.2 | 1.7 |
Fair value movement investments | --- | --- |
Fair value movement NZD debt | (15.3) | (37.8) |
| (75.0) | (112.6)|
Total fair value gain (loss) | (74.9) | (112.3)|
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 Categorisation for further information.
Credit spread impact
Corporate debt normally has a credit spread built into the pricing that is applied by the market, over and above the interest rate swap pricing. This spread represents the additional risk of a corporate debt obligation compared with a liquid net settled swap transaction. Refer to Note 17 Debt, financial instruments and risk management, part iv credit risk, for discussion on the credit spread impact on fair value.
Foreign purchases
The Transpower 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 economically hedging foreign purchases, not all forward exchange contracts are hedge accounted.
Debt and investments
Refer to Note 17 Debt, financial Instruments and risk management for information on the use of debt, investments and derivatives.
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NZ Gazette 2011, No 184
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Operating Expenses for Transpower New Zealand Limited
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💰 Finance & RevenueNet finance expenses, Financial Statements, Transpower, Lines Business