Notes to the consolidated financial statements - Efacec

) Cash fl ow hedging
The effective part of the change in fair value of derivatives that are arranged and qualifi ed for cash fl ow hedging is recognised in
shareholders’ funds. The gain or loss related to the ineffective part is immediately recognised in the profi t and loss account.
As pertains cover strategies that use options, in accordance with IAS 39 and complying with the effi ciency test, the strategy value
is split into the intrinsic value and the time value.
The cumulative amounts in shareholders’ funds are reclassifi ed to profi t and loss in the same period in which the item covered
generates gains and losses (for instance, when the covered sales forecast occurs). However, when the covered forecast transaction
results in the recognition of a non-fi nancial asset (for example, stocks) or non-fi nancial liability, the previously deferred gains and
losses in shareholders’ funds are transferred and included in the initial measurement of that asset or liability.
When a hedge instrument expires or is sold, or when a hedging does not comply with the accounting and qualifi cation criteria, any
cumulative gain or loss existing at that moment in shareholders’ funds, remains in shareholders’ funds and is recognised when
the forecast transaction is fi nally refl ected in the profi t and loss account. When the expected occurrence of a forecast transaction
is no longer highly probable, the cumulative gains or losses refl ected in shareholders’ funds are immediately transferred to profi t
and loss.
c) Non-qualifi ed derivatives for hedging purposes
Certain derivatives do not comply with hedging accounting and qualifi cation criteria. Changes in fair value of these derivatives are
immediately recognised in the profi t and loss account.
2.3 Estimates of fair value
The fair value of fi nancial instruments available on the current market (for instance publicly negotiated derivatives, negotiable
instruments available for sale) is determined on the basis of quoted market prices at balance sheet date. The quoted market price
used for fi nancial assets of the Group is the price received by shareholders on the current market; the quoted market price for
fi nancial liabilities is the price paid on the current market.
The fair value of fi nancial instruments not traded on the current market (for instance unquoted derivatives) is determined using
enhancement techniques. The Group uses a variety of methods and reaches its conclusions based on market conditions at each
balance sheet date. Quoted market prices or negotiation quotas for similar instruments are used for long-term debts. Other techniques,
such as estimates of discounted cash fl ows, are used to determine the fair value of other fi nancial instruments. The fair
value of interest rate swaps is calculated based on the present value of estimated future cash fl ows. The fair value of interest rate
futures contracts is determined using market exchange rates at the balance sheet date.
The nominal value less estimated credit adjustments of receivable and payable accounts is assumed to be close to their fair value.
The fair value of fi nancial liabilities is estimated by updating future contractual cash fl ows at the current market interest rate available
for similar fi nancial instruments.
17
2008 Consolidated and
Individual Financial Statments