Full Annual Report - Inchcape

Section
Three
Financial
statements
25 Other reserves
Available for
sale reserve
£m
Translation
reserve
£m
Hedging
reserve
£m
Total other
reserves
£m
At 1 January 2008 0.7 10.8 1.2 12.7
Cash flow hedges:
– Fair value movements – – 136.9 136.9
– Reclassified and reported in inventories – – (25.3) (25.3)
– Tax on cash flow hedges – – (33.4) (33.4)
Movement on net investment hedge – (14.4) – (14.4)
Movement on available for sale financial assets (1.1) – – (1.1)
Foreign exchange gains recycled through the consolidated income statement – (2.1) – (2.1)
Effect of foreign exchange rate changes – 199.8 – 199.8
At 1 January 2009 (0.4) 194.1 79.4 273.1
Cash flow hedges:
– Fair value movements – – (164.6) (164.6)
– Reclassified and reported in inventories – – 37.8 37.8
– Tax on cash flow hedges – – 38.0 38.0
Movement on net investment hedge – 2.9 – 2.9
Movement on available for sale financial assets 0.4 – – 0.4
Effect of foreign exchange rate changes – (75.2) – (75.2)
At 31 December 2009 – 121.8 (9.4) 112.4
Available for sale reserve
Gains and losses on available for sale financial assets are recognised in the ‘available for sale reserve’ until the asset is sold or is
considered to be impaired, at which time the cumulative gain or loss is included in the consolidated income statement.
Translation reserve
The translation reserve is used to record foreign exchange rate changes relating to the translation of the results of foreign subsidiaries
arising after 1 January 2004. It is also used to record foreign exchange differences arising on long-term foreign currency borrowings
used to finance or hedge foreign currency investments.
Hedging reserve
For cash flow hedges that meet the conditions for hedge accounting, the portion of the gains or losses on the hedging instrument that
are determined to be an effective hedge are recognised directly in shareholders’ equity. When the hedged firm commitment results in
the recognition of a non-financial asset or liability then, at the time the asset or liability is recognised, the associated gains or losses that
had previously been recognised in shareholders’ equity are included in the initial measurement of the acquisition cost or other carrying
amount of the asset or liability.
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