EasyJet 2011 Annual Report Download - page 93

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Fair value of derivative financial instruments
At 30 September 2011
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 2,157 18 23 (2) – 39
Euro 501 3 8 – – 11
Swiss franc 140 1 1 (3) (1) (2)
Jet fuel 2 2 43 (47) (26) (28)
Designated as held for trading:
US dollar 1,240 – 8 – – 8
24 83 (52) (27) 28
At 30 September 2010
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 911 2 14 (4) (2) 10
Euro 263 2 12 – – 14
Swiss franc 69 – – (1) – (1)
Jet fuel 2 4 27 (4) (2) 25
Designated as held for trading:
US dollar 1,055 – – (1) – (1)
8 53 (10) (4) 47
For currency contracts, quantity represents the nominal value of currency contracts held, disclosed in the
contract currency. For jet fuel contracts, quantity represents contracted metric tonnes.
All derivative financial instruments are in level 2 of the IFRS 7 fair value hierarchy.
Derivatives designated as cash flow hedges
All derivatives to which hedge accounting is applied are designated as cash flow hedges.
Changes in fair value are recognised directly in other comprehensive income, to the extent that they are
effective, with the ineffective portion being recognised in the income statement.
Where the hedged item is a non-financial asset or liability, the accumulated gains and losses previously
recognised in other comprehensive income are included in the carrying value of that asset or liability. Otherwise
accumulated gains and losses are recognised in the income statement in the same period in which the hedged
item affects the income statement.
easyJet uses forward contracts to hedge US dollar transaction currency risk (comprising fuel, leasing and
maintenance payments), jet fuel price risk and euro and Swiss franc revenues. Where these hedges are
assessed as highly effective, gains and losses are deferred in other comprehensive income and transferred to
the income statement or cost of property, plant and equipment when the related cash flow occurs.
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