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This excerpt taken from the CCK 8-K filed May 5, 2009. Derivatives and Hedging. All
outstanding derivative financial instruments are recognized in the balance sheet
at their fair values. The impact on earnings from recognizing the fair values of
these instruments depends on their intended use, their hedge designation and
their effectiveness in offsetting changes in the fair values of the exposures
they are hedging. Changes in the fair values of instruments designated to reduce
or eliminate adverse fluctuations in the fair values of recognized assets and
liabilities and unrecognized firm commitments are reported currently in earnings
along with changes in the fair values of the hedged items. Changes in the
effective portions of the fair values of instruments used to reduce
or eliminate adverse fluctuations in cash flows of anticipated or forecasted
transactions are reported in shareholders’ equity as a component of accumulated
other comprehensive income. Amounts in accumulated other comprehensive income
are reclassified to earnings when the related hedged items impact earnings or
the anticipated transactions are no longer probable. Changes in the fair values
of derivative instruments that are not designated as hedges or do not qualify
for hedge accounting treatment are reported currently in earnings. Amounts
reported in earnings are classified consistent with the item being
hedged.
The
effectiveness of derivative instruments in reducing risks associated with the
hedged exposures is assessed at inception and on an ongoing basis. Any amounts
excluded from the assessment of hedge effectiveness, and any ineffective portion
of designated hedges, are reported currently in earnings. Time value, a
component of an instrument’s fair value, is excluded in assessing effectiveness
for fair value hedges, except hedges of firm commitments, and included for cash
flow hedges.
Hedge
accounting is discontinued prospectively when (i) the derivative instrument is
no longer effective in offsetting changes in fair value or cash flows of the
underlying hedged item, (ii) the derivative instrument expires, is sold,
terminated or exercised, or (iii) designating the derivative instrument as a
hedge is no longer appropriate.
The
Company formally documents all relationships between its hedging instruments and
hedged items at inception, including its risk management objective and strategy
for establishing various hedge relationships. Cash flows from hedging
instruments are classified in the Consolidated Statements of Cash Flows
consistent with the items being hedged.
These excerpts taken from the CCK 10-K filed Feb 27, 2009. Derivatives and Hedging. All
outstanding derivative financial instruments are recognized in the balance sheet
at their fair values. The impact on earnings from recognizing the fair values of
these instruments depends on their intended use, their hedge designation and
their effectiveness in offsetting changes in the fair values of the exposures
they are hedging. Changes in the fair values of instruments designated to reduce
or eliminate adverse fluctuations in the fair values of recognized assets and
liabilities and unrecognized firm commitments are reported currently in earnings
along with changes in the fair values of the hedged items. Changes in the
effective portions of the fair values of instruments used to reduce
or eliminate adverse fluctuations in cash flows of anticipated or forecasted
transactions are reported in shareholders’ equity as a component of accumulated
other comprehensive income. Amounts in accumulated other comprehensive income
are reclassified to earnings when the related hedged items impact earnings or
the anticipated transactions are no longer probable. Changes in the fair values
of derivative instruments that are not designated as hedges or do not qualify
for hedge accounting treatment are reported currently in earnings. Amounts
reported in earnings are classified consistent with the item being
hedged.
The
effectiveness of derivative instruments in reducing risks associated with the
hedged exposures is assessed at inception and on an ongoing basis. Any amounts
excluded from the assessment of hedge effectiveness, and any ineffective portion
of designated hedges, are reported currently in earnings. Time value, a
component of an instrument’s fair value, is excluded in assessing effectiveness
for fair value hedges, except hedges of firm commitments, and included for cash
flow hedges.
Hedge
accounting is discontinued prospectively when (i) the derivative instrument is
no longer effective in offsetting changes in fair value or cash flows of the
underlying hedged item, (ii) the derivative instrument expires, is sold,
terminated or exercised, or (iii) designating the derivative instrument as a
hedge is no longer appropriate.
The
Company formally documents all relationships between its hedging instruments and
hedged items at inception, including its risk management objective and strategy
for establishing various hedge relationships. Cash flows from hedging
instruments are classified in the Consolidated Statements of Cash Flows
consistent with the items being hedged.
Derivatives and Hedging. All
outstanding derivative financial instruments are recognized in the balance sheet
at their fair values. The impact on earnings from recognizing the fair values of
these instruments depends on their intended use, their hedge designation and
their effectiveness in offsetting changes in the fair values of the exposures
they are hedging. Changes in the fair values of instruments designated to reduce
or eliminate adverse fluctuations in the fair values of recognized assets and
liabilities and unrecognized firm commitments are reported currently in earnings
along with changes in the fair values of the hedged items. Changes in the
effective portions of the fair values of instruments used to reduce
or eliminate adverse fluctuations in cash flows of anticipated or forecasted
transactions are reported in shareholders’ equity as a component of accumulated
other comprehensive income. Amounts in accumulated other comprehensive income
are reclassified to earnings when the related hedged items impact earnings or
the anticipated transactions are no longer probable. Changes in the fair values
of derivative instruments that are not designated as hedges or do not qualify
for hedge accounting treatment are reported currently in earnings. Amounts
reported in earnings are classified consistent with the item being
hedged.
The
effectiveness of derivative instruments in reducing risks associated with the
hedged exposures is assessed at inception and on an ongoing basis. Any amounts
excluded from the assessment of hedge effectiveness, and any ineffective portion
of designated hedges, are reported currently in earnings. Time value, a
component of an instrument’s fair value, is excluded in assessing effectiveness
for fair value hedges, except hedges of firm commitments, and included for cash
flow hedges.
Hedge
accounting is discontinued prospectively when (i) the derivative instrument is
no longer effective in offsetting changes in fair value or cash flows of the
underlying hedged item, (ii) the derivative instrument expires, is sold,
terminated or exercised, or (iii) designating the derivative instrument as a
hedge is no longer appropriate.
The
Company formally documents all relationships between its hedging instruments and
hedged items at inception, including its risk management objective and strategy
for establishing various hedge relationships. Cash flows from hedging
instruments are classified in the Consolidated Statements of Cash Flows
consistent with the items being hedged.
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