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DES - Online Annual Report 2008

My Annual Report

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My Annual Report

1. Derivative financial instruments

Derivatives that qualify for hedge accounting in accordance with IAS 39 are used to hedge interest rate risks. They are fixed-rate swaps to limit the interest rate risk of a variable-interest rate loan. These interest rate hedges are recognised at fair value under Other assets or Other liabilities. As long as the conditions of the underlying and hedge transaction are identical, changes are recognised directly in equity. A test of effectiveness for the hedges is regularly implemented. Present value is calculated based on discounted cash flows using current market rates. The interest rate hedges have terms that run until 2026.

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