Service-oriented - Die Schweizerische Post

Annual Report | Financial Report | Financial statements of Swiss Post Group
Replacement cost (positive or negative fair value)
The replacement cost is the fair value of a derivative financial instrument, i.e. the price one would have to pay
to enter into a replacement transaction if the counterparty were to default. Positive fair values are subject
to credit risk and represent the maximum loss that the bank would suffer at the reporting date if the counterparty
were to default. Negative fair values occur where there is the possibility of entering into replacement
transactions on more favourable terms.
Contract volume
This represents the receivables side of the derivative financial instruments’ underlyings or the notional amounts
(underlying value).
Swiss Post buys derivative financial instruments mainly for hedging purposes. Hedge accounting is applied if
the derivative financial instruments are effective in offsetting changes in fair value or cash flows attributable to
the hedged risks.
Derivatives that are not accounted for using hedge accounting are treated as instruments held for trading.
See also Note 31, “Financial Risk Management” for information on the risk strategy. PostFinance has been using
hedge accounting since the third quarter of 2005.
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