Unilever 2013 Annual Report Download - page 128

16C. DERIVATIVES AND HEDGING CONTINUED
MASTER NETTIN OR SIMILAR AREEMENTS
A number of legal entities within our Group enter into derivative transactions under International Swap and Derivatives Association
(ISDA) master netting agreements. In general, under such agreements the amounts owed by each counter-party on a single day in
respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the
other. In certain circumstances such as when a credit event such as a default occurs, all outstanding transactions under the agreement
are terminated, the termination value is assessed and only a single net amount is payable in settlement of all transactions.
The ISDA agreements do not meet the criteria for offsetting the positive and negative values in the consolidated balance sheet.
This is because the Group does not have any currently legally enforceable right to offset recognised amounts, between various Group
and bank affiliates, because the right to offset is enforceable only on the occurrence of future credit events such as a default.
The column ‘Related amounts not set off in the balance sheet-Financial instruments’ shows the netting impact of our ISDA agreements,
assuming the agreements are respected in the relevant jurisdiction.
(A) FINANIAL ASSETS
The following financial assets are subject to offsetting, enforceable master netting arrangements and similar agreements.
Related amounts not set off
n the balance sheet
As at 31 December 2013
 mllon
ross amounts of
recognsed
fnancal assets
 mllon
ross amounts of
recognsed
fnancal labltes
set off n the
balance sheet
 mllon
Net amounts of
fnancal assets
presented n the
balance sheet
 mllon
Fnancal
nstruments
 mllon
ash collateral
receved
 mllon
Net amount
Derivative financial assets 376 –376 (82) (5) 289
As at 31 December 2012
Derivative financial assets 319 (126) 193 (88) (6) 99
(B) FINANIAL LIABILITIES
The following financial liabilities are subject to offsetting, enforceable master netting arrangements and similar agreements.
Related amounts not set off
n the balance sheet
As at 31 December 2013
 mllon
ross amounts of
recognsed
fnancal assets
 mllon
ross amounts of
recognsed
fnancal labltes
set off n the
balance sheet
 mllon
Net amounts of
fnancal assets
presented n the
balance sheet
 mllon
Fnancal
nstruments
 mllon
ash collateral
receved
 mllon
Net amount
Derivative financial liabilities 395 –395 (82) –313
As at 31 December 2012
Derivative financial liabilities 454 (126) 328 (88) –240
17 INVESTMENT AND RETURN
ASH AND ASH EQUIVALENTS
Cash and cash equivalents in the balance sheet include deposits, investments in money market funds and highly liquid investments.
To be classified as cash and cash equivalents, an asset must:
• be readily convertible into cash;
• have an insignificant risk of changes in value; and
• have a maturity period of three months or less at acquisition.
Cash and cash equivalents in the cash flow statement also include bank overdrafts and are recorded at amortised cost.
OTHER FINANIAL ASSETS
Other financial assets are first recognised on the trade date. At that point, they are classified as:
(i) held-to-maturity investments;
(ii) loans and receivables;
(iii) available-for-sale financial assets; or
(iv) financial assets at fair value through profit or loss.
125Unlever Annual Report and Accounts 2013 Fnancal statements