Division 131 F1

Under IFRS, the ‘ carrying amount ’ for all derivatives (hedging or trading) shall be the fair value. Derivatives with a positive fair value (above zero) shall be ‘ financial assets ’ and derivatives with a negative fair value (below zero) shall be ‘ financial liabilities ’ . The ‘ carrying amount ’ shall be reported separately for derivatives with a positive fair value ( ‘ financial assets ’ ) and for those with a negative fair value ( ‘ financial liabilities ’ ). At the date of initial recognition, a derivative shall be classified as ‘ financial asset ’ or ‘ financial liability ’ according to its initial fair value. After initial recognition, as the fair value of a derivative increases or decreases, the terms of the exchange may become either favourable to the institution (and the derivative is classified as ‘ financial asset ’ ) or unfavourable (and the derivative is classified as ‘ financial liability ’ ). The carrying amount of hedging derivatives shall be their entire fair value, including, where applicable, the components of this fair value that are not designated as hedging instruments.