Nokia 2010 Annual Report Download - page 242

21. Fair value and other reserves (Continued)
Gross Tax Net Gross Tax Net Gross Tax Net
Hedging reserve,
EURm
Availableforsale
investments, EURm Total, EURm
Availableforsale Investments:
Net fair value gains (losses) .................. — — — 36 (4) 32 36 (4) 32
Transfer to income statement on impairment . . . . . . — — — 14 — 14 14 — 14
Transfer of net fair value (gains) losses to income
statement on disposal . . .................. — — — (2) — (2) (2) — (2)
Movements attributable to noncontrolling
interests ............................... (65) 16 (49) (2) — (2) (67) 16 (51)
Balance at December 31, 2009 ................ 61 (15) 46 17 6 23 78 (9) 69
Cash flow hedges:
Net fair value gains (losses) .................. (119) 12 (107) — — — (119) 12 (107)
Transfer of (gains) losses to income statement as
adjustment to Net Sales . .................. 357 (57) 300 — — — 357 (57) 300
Transfer of (gains) losses to income statement as
adjustment to Cost of Sales ................. (379) 70 (309) — — — (379) 70 (309)
Availableforsale Investments:
Net fair value gains (losses) .................. — — — (3) (2) (5) (3) (2) (5)
Transfer to income statement on impairment . . . . . . — — — 13 — 13 13 — 13
Transfer of net fair value (gains) losses to income
statement on disposal . . .................. — — — (1) — (1) (1) — (1)
Movements attributable to noncontrolling
interests ............................... 50 (7) 43 — — — 50 (7) 43
Balance at December 31, 2010 ................ (30) 3 (27) 26 4 30 (4) 7 3
In order to ensure that amounts deferred in the cash flow hedging reserve represent only the
effective portion of gains and losses on properly designated hedges of future transactions that remain
highly probable at the balance sheet date, Nokia has adopted a process under which all derivative
gains and losses are initially recognized in the income statement. The appropriate reserve balance is
calculated at the end of each period and posted to the fair value and other reserves.
The Group continuously reviews the underlying cash flows and the hedges allocated thereto, to
ensure that the amounts transferred to the fair value reserves during the years ended December 31,
2010 and 2009 do not include gains/losses on forward exchange contracts that have been designated
to hedge forecasted sales or purchases that are no longer expected to occur.
All of the net fair value gains or losses recorded in the fair value and other reserve at December 31,
2010 on open forward foreign exchange contracts which hedge anticipated future foreign currency
sales or purchases are transferred from the hedging reserve to the income statement when the
forecasted foreign currency cash flows occur, at various dates up to approximately 1 year from the
balance sheet date.
F54
Notes to the Consolidated Financial Statements (Continued)