BT 2015 Annual Report Download - page 194

192 BT Group plc
Annual Report 2015
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Derivatives
ll of the roups derivative financial instruents are held at fair value on the roups balance sheet. he fair values of outstandin swaps and forein
echane contracts are estiated usin discounted cash ow odels and aret rates of interest and forein echane at the balance sheet date.
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At 31 March 2015
Current
asset
£m
Non-current
asset
£m
Current
liability
£m
Non-current
liability
£m
esinated in a cash ow hede 86 941 161 698
Designated in a fair value hedge 6 143 – –
Other 5148 7229
7RWDOGHULYDWLYHV 97  168 927
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At 31 March 2014
Current
asset
£m
Non-current
asset
£m
Current
liability
£m
Non-current
liability
£m
esinated in a cash ow hede 73 394 74 514
Designated in a fair value hedge 6 61 – –
Other 35 84 65 165
7RWDOGHULYDWLYHV 114 539 139 679
urin the ear the roup deferred a ain of nil 011 1 relatin to the fair value of a derivative ener contract at initial reconition.
t 1 arch 01 the aount deferred which is not et reconised in the incoe stateent is 1 011 1. ith the eception of
this contract which is included at evel  and valued usin assuptions on volues ination and aret ener prices all other derivative financial
instruents are cateorised at evel  of the fair value hierarchasdefined in note .
Hedging activities
erivatives a ualif as hedes for accountin purposes if the eet the criteria for desination as fair value hedes or cash ow hedes in
accordance with IAS 39.
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nstruents desinated in a cash ow hede include interest rate swaps and cross-currenc swaps hedin uro and U ollar denoinated
borrowings. Forward currency contracts are taken out to hedge step-up interest on currency denominated borrowings relating to the group’s 2030
U ollar bond. he heded cash ows will aect the roups incoe stateent as interest and principal aounts are repaid over the reainin ter
of the borrowins seenote .
Forecast foreign currency purchases, principally denominated in US Dollar, Euro and sia acific currencies are heded 1 onths forward, with
certain specific transactions hedged further forward. he related cash ows are reconised in the incoe stateent over this period.
ll cash ow hedes were full eective in the period. ee note  for details of the oveents in the cash ow hede reserve.
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Fair value hedges consist of interest rate and cross-currency swaps that are used to protect against changes in the fair value of the 2028 Sterling
bond due to movements in market interest rates.
Gains and losses arising on fair value hedges are disclosed in note 25.
Other derivatives
The group’s policy is not to use derivatives for speculative purposes. However, due to the complex nature of hedge accounting under IAS 39, some
derivatives a not ualif for hede accountin or are specificall not desinated as a hede where natural oset is ore appropriate. erivative
instruents that do not ualif for hede accountin are classified as held for tradin and held at fair value throuh profit or loss under  9.