BT 1998 Annual Report Download - page 47

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Please find page 47 of the 1998 BT annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

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A C C O U N T I N G P O L I C I E
(b) Derivative financial instruments (continued)
Accounting for derivative financial instruments
Principal amounts underlying currency swaps are revalued
at exchange rates ruling at the date of the group balance
sheet and are included in debtors or creditors.
Interest differentials, under interest rate swap agreements
used to vary the amounts and periods for which interest
rates on borrowings are fixed, are recognised by
adjustment of interest payable.
The forward exchange contracts used to change the
currency mix of net debt are revalued to balance sheet
rates with net unrealised gains and losses being shown as
part of debtors or creditors. The difference between spot
and forward rate for these contracts is recognised as part
of net interest payable over the term of the contract.
The forward exchange contracts hedging transaction
exposures are revalued at the prevailing forward rate on
the balance sheet date with net unrealised gains and losses
being shown as debtors and creditors.