Reebok 2015 Annual Report Download - page 175

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GROUP MANAGEMENT REPORT – FINANCIAL REVIEW
Risk and Opportunity Report – Illustration of Material Risks
In accordance with IFRS 7, the table below includes further information about set-off possibilities of
derivative financial assets and liabilities. The majority of agreements between financial institutions and
the adidas Group include a mutual right to set-off. However, these agreements do not meet the criteria
for offsetting in the statement of financial position, because the right to set-off is enforceable only in the
event of counterparty defaults.
The carrying amounts of recognised derivative financial instruments, which are subject to the mentioned
agreements, are presented in the table below.
Interest rate risks
Changes in global market interest rates affect future interest payments for variable-interest liabilities. As
the Group does not have material variable-interest liabilities, significant interest rate increases should
have only slight adverse effects on the Group’s profitability, liquidity and financial position.
In line with IFRS 7 requirements, we have analysed the impact of changes in the Group’s most important
interest rates on net income and shareholders’ equity. The effect of interest rate changes on future cash
flows is excluded from this analysis. Nevertheless, accrued interest, which is recognised as a liability, has
been recalculated based on the hypothetical market interest rates as at December 31, 2015. Fair values
for derivative interest rate instruments accounted for as cash flow hedges were then re-evaluated based
on the hypothetical market interest rates with the resulting effects on net income and equity included in
the sensitivity analysis.
However, the effect on the income statement from changes in the fair values of hedged items and hedging
instruments attributable to interest rate changes was not material. Exclusions from this analysis are as
follows:
•
Some fixed-rate financial instruments, such as certificates of deposit, which we value at ‘fair value
through profit or loss’ due to the short-term maturity of these instruments. Potential effects due to
changes in interest rates are considered immaterial and are not recognised in the sensitivity analysis.
•
Other fixed-rate financial instruments are measured at amortised cost. Since a change in interest rates
would not change the carrying amount of this category of instruments, there is no net income impact
and they are excluded from this analysis.
see Table 06
see Table 06
06SET-OFF POSSIBILITIES OF DERIVATIVE FINANCIAL ASSETSAND LIABILITIES€ IN MILLIONS
2015 2014
Assets
Gross amounts of recognised financial assets 228 285
Financial instruments which qualify for set-off in the statement of financial position 0 0
Net amounts of financial assets presented in the statement of financial position 228 285
Set-off possible due to master agreeements (57) (53)
Total net amount of financial assets 171 232
Liabilities
Gross amounts of recognised financial liabilities (61) (55)
Financial instruments which qualify for set-off in the statement of financial position 0 0
Net amounts of financial liabilities presented in the statement of financial position (61) (55)
Set-off possible due to master agreeements 57 53
Total net amount of financial liabilities (4) (2)