Corporate Magazine 2012 - Boehringer Ingelheim

usiness year 2012consolidated financial statementsThe following accounting policies apply in the recognition of hedges in accordance with 254 HGB:Economic hedges are accounted for by hedge accounting. Hedges are recognised per foreign currency fromthe net amount of highly probable forecasted transactions and currency forwards that match the forecastednet cash flow in terms of maturity, nominal amount and foreign currency (macro hedge). The highlyprobable forecasted transactions (incoming and outgoing payments for planned sales and purchases) arederived from company planning. Ex-post analysis of planning has shown that the planned transactions arehighly probable.As the critical terms (maturity, nominal amount, foreign currency) match, the opposing changes in value ofthe hedged item and the hedging instrument are fully offset. An effective hedge can therefore be assumedboth prospectively and retrospectively. The critical term match method is exclusively used to measure prospectiveand retrospective hedge effectiveness.As of 31 December 2012, hedges for highly probable forecast net cash flows were recognised as follows:January to December 2013:Net cash flow (in millions of EUR)FX forward contracts (in millions of EUR)Nominal value Nominal value Market valueUSD 1,327 USD — 1,004 USD 3JPY 1,030 JPY — 759 JPY 51AUD 172 AUD — 107 AUD 0MXN 91 MXN — 87 MXN — 1CAN 181 CAN — 137 CAN 2GBP 217 GBP — 147 GBP 0January to December 2014:Net cash flow (in millions of EUR)FX forward contracts (in millions of EUR)Nominal value Nominal value Market valueUSD 1,069 USD — 624 USD 5JPY 870 JPY — 566 JPY 47AUD 152 AUD — 60 AUD 0MXN 21 MXN — 18 MXN 0CAN 179 CAN — 92 CAN 1GBP 34 GBP — 28 GBP 0Notes to the consolidated financial statements63