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METRO gROUP : ANNUAL REPORT 2011 : BUsiNEss
→ noTes : oTHeR noTes
MeTRo GRoUp faces currency risks in its international procurement
of merchandise and because of costs and financings
that are incurred in a currency other than the relevant
local currency or are pegged to the price of another currency.
In accordance with the Group guideline “Foreign Currency
Transactions”, resulting foreign currency positions must
be hedged. exceptions from this hedging requirement exist
where hedging is not economically reasonable and in the
case of legal and regulatory restrictions in the respective
countries. Forex futures as well as interest rate swaps and
currency swaps are used to limit currency risks.
In line with IFRs 7, the presentation of the currency risk
resulting from the exceptions is also based on a sensitivity
analysis. In the process, the following assumptions are made
in the consideration of a devaluation or revaluation of the
euro vis-à-vis other currencies:
In terms of its amount and result characteristic, the total
effect presented by the sensitivity analysis relates to the
amounts of foreign currency held within the consolidated
subsidiaries of MeTRo GRoUp and states the effect of a
devaluation or revaluation of the euro.
a devaluation of the euro will result in a positive effect if a foreign
currency receivable exists at a subsidiary which uses the
euro as its functional currency, and if a liability in euro exists
at a subsidiary which does not use the euro as its functional
currency. a devaluation of the euro will result in a negative
effect if a receivable in euro exists at a subsidiary which does
not use the euro as its functional currency and if a liability
in euro exists at a subsidiary which uses the euro as its
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functional currency. Conversely, any appreciation of the euro
will have the opposite effect.
In the sensitivity analysis, the effects of the measurement
of non-equity foreign currency positions that are calculated
based on the closing date price in line with Ias 21 are recognised
in income in the income statement. In the case of net
investments in foreign currency, the effects of the closing
date measurement are recognised in equity without being
reported as a profit or loss.
Foreign currency futures/options and interest rate and currency
swaps that are not part of a qualified hedge under
Ias 39 are recognised in income through the fair value
measurement in the income statement. In fully effective
hedging transactions, this effect is offset by the effect
from the measurement of the underlying foreign currency
transaction.
Foreign currency futures/options and interest rate and currency
swaps that are designated as the hedging transaction
within a cash flow hedge to hedge against payment flows in
foreign currency will only be recognised in the income statement
when the payment flows are actually initiated. The
measurement of the hedging transaction at its fair value,
however, is recognised in reserves retained from earnings
without being reported as a profit or loss.
effects from the currency translation of financial statements
whose functional currency is not the reporting currency of
MeTRo GRoUp do not affect cash flows in local currency and
are therefore not part of the sensitivity analysis.