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112 easyJet plc Annual report and accounts 2015
Notes to the accounts continued
21. Financial instruments continued
Fair value calculation methodology
Derivative financial instruments are forward contracts that are valued based on market rates and market-accepted models. Fair value for
financial instruments held at amortised cost has been estimated by discounting cash flows at prevailing interest rates and by applying year
end exchange rates.
Fair value of derivative financial instruments
At 30 September 2015
Quantity
million
Non-current
assets
£ million
Current
assets
£ million
Current
liabilities
£ million
Non-current
liabilities
£ million
Total
£ million
Designated as cash flow hedges
US dollar 2,614 18 71 (1) (2) 86
Euro 2,360 23 55 (3) (4) 71
Swiss franc
329 2 2 (1) (1) 2
South African rand
479 – – – – –
Jet fuel 3 1 – (363) (94) (456)
44 128 (368) (101) (297)
At 30 September 2014
Quantity
million
Non-current
assets
£ million
Current
assets
£ million
Current
liabilities
£ million
Non-current
liabilities
£ million
Total
£ million
Designated as cash flow hedges
US dollar 3,358 17 8 (33) (3) (11)
Euro 990 16 39 – – 55
Swiss franc 238 3 6 – – 9
Jet fuel 3 – – (54) (20) (74)
36 53 (87) (23) (21)
For foreign currency forward exchange contracts, quantity represents the nominal value of currency contracts held, disclosed in the
contract currency. For jet fuel forward contracts, quantity represents contracted metric tonnes.
The hedged transactions are expected to occur on various dates mainly within the next two years. Accumulated gains and losses deferred
in the hedging reserve will be recognised in the income statement in the periods that the hedged transaction affects the income statement.
This will generally be within two years of the end of the reporting period save where the gain or loss is included in the initial amount
recognised for the purchase of aircraft in which case recognition will be over a period of up to 23 years in the form of depreciation of
the purchased asset.
The following financial assets and liabilities are subject to offsetting, enforceable master netting arrangements:
At 30 September 2015
Gross
amount
£ million
Amount
not set off
£ million
Net
amount
£ million
Derivative financial instruments
Assets 172 (145) 27
Liabilities (469) 145 (324)
(297) – (297)
At 30 September 2014
Gross
amount
£ million
Amount
not set off
£ million
Net
amount
£ million
Derivative financial instruments
Assets 89 (69) 20
Liabilities (110) 69 (41)
(21) – (21)
All financial assets and liabilities are presented gross on the face of the statement of financial position as the conditions for netting specified
in IAS 32 ‘Financial Instruments Presentation’ are not met.