EasyJet 2013 Annual Report Download - page 121

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Amounts disclosed in the ‘Other’ column are items that do not meet the definition of a financial instrument. They are
disclosed to facilitate reconciliation of the carrying values of financial instruments to line items presented in the
statement of financial position.
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Derivative financial instruments are forward contracts that are valued based on market rates and market-accepted
models. Fair value for financial instruments held at amortised cost has been estimated by discounting cash flows
at prevailing interest rates and by applying year end exchange rates.
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Designated as cash flow hedges 
US dollar  ± ±   
Euro      
Swiss franc     ± 
Jet fuel      
    
At 30 September 2012 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 3,204 1 4 (11) (15) (21)
Euro 653 5 20 – – 25
Swiss franc 202 1 4 – – 5
Jet fuel 2 14 45 (6) (9) 44
Designated as held for trading
US dollar 850 – – (9) – (9)
21 73 (26) (24) 44
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.
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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, the accumulated gains and losses previously recognised in other
comprehensive income are included in the carrying value of that asset. 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 when the related
cash flow occurs.
119
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