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Notes

5 Hedge Accounting

The rules under IAS 39 on hedge accounting apply to derivatives demonstrably used to hedge risks arising from non-trading transactions. At comdirect bank AG, fair value hedges were used exclusively to hedge the market price risk of individual securities using interest rate swaps. The application of the hedge accounting rules is contingent on the comprehensive documentation of the hedging relationship and evidence of the effectiveness of the hedge.

The fair values determined are reported in the balance sheet as “positive fair values from derivative hedging instruments” or “negative fair values from derivative hedging instruments”. The changes in fair value of the hedges and hedged items resulting from the hedged risk are recognised in the income statement under “result from hedge accounting”. In an effective hedge, the changes in value of an hedged item and the hedge recorded in the income statement will largely offset one another.