29 FINANCIAL INSTRUMENTS
(continued)
Interest rate risk
(continued)
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial liabilities at fair value through profit or
loss, and the Group does not designate derivatives (interest rate swaps) as hedging instruments
under a fair value hedge accounting model. Therefore a change in interest rates at the reporting
date would not affect the statement of total return.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis point in interest rate at the reporting date would increase/(decrease)
Unitholders’ funds and statement of total return by the amounts shown below. This analysis
assumes that all other variables, in particular foreign currency rates, remain constant. The
analysis is performed on the same basis for 2013.
Statement of total return
Unitholders’ funds
100 bp
increase
100 bp
decrease
100 bp
increase
100 bp
decrease
$’000
$’000
$’000
$’000
Group
31 December 2014
Variable rate financial liabilities
(10,389)
10,389
–
–
Interest rate swaps
7,221
(7,221)
1,906
(1,906)
Cash flow sensitivity (net)
(3,168)
3,168
1,906
(1,906)
31 December 2013
Variable rate financial liabilities
(8,818)
8,818
–
–
Interest rate swaps
6,638
(6,638)
1,396
(1,396)
Cash flow sensitivity (net)
(2,180)
2,180
1,396
(1,396)
Trust
31 December 2014
Variable rate financial liabilities
(4,777)
4,777
–
–
Interest rate swaps
4,324
(4,324)
1,064
(1,064)
Cash flow sensitivity (net)
(453)
453
1,064
(1,064)
31 December 2013
Variable rate financial liabilities
(4,726)
4,726
–
–
Interest rate swaps
4,428
(4,428)
843
(843)
Cash flow sensitivity (net)
(298)
298
843
(843)
Notes to the Financial Statements
Year ended 31 December 2014
182 | Ascott Residence Trust Annual Report 2014
