Notes to The
Financial Statements
Year ended 31 December 2015
6 Financial derivatives (Cont’d)
Offsetting financial assets and financial liabilities
The Group’s derivative transactions are entered into under International Swaps and Derivatives Association 2002
Master Agreements (“ISDA Master Agreements”) or long-form confirmation with various bank counterparties. In
general, under such ISDA Master Agreements the amounts owed by each counterparty in respect of the same
transactions outstanding in the same currency under the agreement are aggregated into a single net amount that
is payable by one party to the other. In certain circumstances, for example 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 due or payable in settlement of all outstanding transactions.
The above ISDAMaster Agreements or long-form confirmation do not meet the criteria for offsetting in the statement
of financial position. This is because they create a right of set-off of recognised amounts that is enforceable only
following an event of default, insolvency or bankruptcy of the Group or the counterparties. In addition the Group
and its counterparties do not intend to settle on a net basis or to realise the assets and settle the liabilities
simultaneously in its normal course of business.
The following table sets out the carrying amounts of recognised financial instruments that are subject to the
above agreements:
Gross
amounts of
recognised
financial
instruments
Gross amounts
of recognised
financial
instruments
offset in the
Statement
of Financial
Position
Net
amounts of
financial
instruments
included in
the Statement
of Financial
Position
Related
financial
instruments
that are not
offset
Net
amount
$’000
$’000
$’000
$’000
$’000
Group and Trust
31 December 2015
Financial assets
Cross currency interest rate
swap used for hedging
6
–
6
–
6
Forward foreign
exchange contracts
2,641
–
2,641
–
2,641
Total
2,647
–
2,647
–
2,647
Financial liabilities
Interest rate swaps used
for hedging
(3,045)
–
(3,045)
996
(2,049)
Forward foreign
exchange contracts
(412)
–
(412)
–
(412)
Total
(3,457)
–
(3,457)
996
(2,461)
115
ParkwayLife REIT
Annual Report 2015
