Volvo 2015 Annual Report Download - page 159
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GROUP PERFORMANCE 2015 NOTES
157
In the table below outstanding derivatives hedging currency and interest rate risks is presented.
Outstanding derivative instruments
Dec 31, 2015 Dec 31, 2014
SEK M Nominal amount Carrying value Nominal amount Carrying value
Interest-rate swaps
– receivable position 87,712 1,824 86,136 2,137
– payable position 66,793 –763 70,109 –72
Foreign exchange derivatives
– receivable position 44,386 793 16,272 675
– payable position 16,019 –333 24,332 –432
Options purchased
– receivable position 627 5 1,788 65
– payable position 84 – 36 –
Options written
– payable position 755 –3 2,636 –71
Subtotal 1,522 2,302
Raw material derivatives
– receivable position 27 6 208 3
– payable position 236 –68 267 –23
Total 1,460 2,282
Hedge accounting
Volvo Group is only applying hedge accounting on the following specific
hedging relationships:
• Hedging fair value of a loan. Fair value of the hedge instruments out-
standing amounted to SEK 872 M (1,290). Changes in fair value of the
loan related to hedge accounting amounted to SEK neg 611 M (neg
1,022). The changes in the fair value of the hedge instruments and on
the loan have been recognized in finance net in the income statement.
• Hedging of certain net investments in foreign operations done in previ-
ous years. The result of such hedges was recognized as a separate item
in other comprehensive income. In the event of a divestment, the accu-
mulated result from the hedge is recognized in the income statement.
• Hedging of forecasted electricity consumption. Changes in the fair
value are recognized in the cash flow hedge reserve in OCI for effective
hedge accounting.
Refer to Note 19 Equity and numbers of shares for information on the
changes in the fair value on derivatives hedging forecasted electricity
consumption recognized in the cash flow hedge reserve in OCI.
Refer to accounting policies in this note for all other hedging relationships
where hedge accounting is not applied.
Read more in Note 4 for goals and policies in financial risk management
including Volvo Group’s policies on hedging.