ANNUAL REPORT ‘12
NOTES TO THE FINANCIAL STATEMENTS
192
to the contracting of derivative financial instruments with speculative objectives. The use of this kind of financial
instrument respects the internal policies defined by the Management.
With regard to the derivative financial instruments that, although contracted with a view to carrying out economic
coverage according to the Group’s risk management policies, do not fulfil all the dispositions of the IAS 39 in
terms of qualifying as coverage accounting or that were not specifically assigned to a relation of accounting
coverage, the respective variations in the fair value are shown in the income statement of the period in which
they occur.
Derivative financial instruments are shown on their trade date, at their fair value. Subsequently, the fair value of
the derivative financial instruments is regularly re-evaluated, the resulting gains or losses of this re-evaluation are
shown directly in the results for the period, except in cases that refer to coverage derivatives. The recognition of
the variations of the fair value of the coverage derivatives depends on the nature of the risk covered and the model
of coverage used.
Coverage accounting
Derivative financial instruments used for purposes of coverage can be classified in accounting terms as coverage
as long as they fulfil, cumulatively, the following conditions:
(i) On the date the transaction is initiated, the coverage relation has been identified and formally documented,
including the identification of the covered item, the coverage instrument and an evaluation of the effectiveness
of the coverage;
(ii) There is an expectation that the coverage relation will be highly effective, at the date the transaction is initiated
and over the life of the operation;
(iii) The effectiveness of the coverage can be reliably measured at the date the transaction is initiated and over
the life of the operation;
(iv) For cash flow coverage operations, there must be a high probability that they will occur.
Interest rate risk (coverage of fair value)
Coverage instruments that are designated and qualify as fair value coverage are shown in the financial statement
at their fair value as a counterpart to results. Simultaneously, the change in the fair value of the covered instruments,
in the component that is being covered, is adjusted as a counterpart to results. Consequently, any ineffectiveness
of the coverages is immediately shown in the results.
If the coverage ceases to comply with the criteria required for coverage accounting, the derivative financial instru-
ment is transferred to the trading portfolio and the coverage accounting is discontinued.
Interest rate risk (cash flow coverage)
The operations that qualify as coverage instruments with regard to cash flow coverage are shown in the financial
statement at their fair value and, insofar as they are considered to be effective coverages, the variations in the fair
