FAIRFAX MEDIA  LIMITED  2013  67 NOTEs TO THE FINANCIAL sTATEMENTs  1. sUMMARY OF sIGNIFICANT ACCOUNTING POLICIEs (CONTINUED) Cash flow hedge net investment hedge Hedge accounting (O) PROPERTY, PLANT AND EQUIPMENT derivatives that do not qualify for hedge accounting Fair value hedge FAIRFAx MEDIA LIMITED AND CONTROLLED ENTITIES FOR THE PERIOD ENDED 30 JUNE 2013 (iV) Held To MATuRiTy inVeSTMenTS carrying amount of the hedged item and recognised in the  income statement within finance costs. Where the adjustment  is to the carrying amount of a hedged interest bearing  financial instrument, the adjustment is amortised to the  income statement such that it is fully amortised by maturity.  When the hedged firm commitment results in the recognition  of an asset or a liability, then, at the time the asset or liability  is recognised, the associated gains or losses that had  previously been recognised in equity are included in the  initial measurement of the acquisition cost or other carrying  amount of the asset or liability. Held to maturity investments are non-derivative financial  assets with fixed or determinable payments and fixed  maturities that the Group’s management has the positive  intention and ability to hold to maturity. These assets  are measured at amortised cost using the effective  interest method. Financial assets other than derivatives are recognised  at fair value or amortised cost in accordance with the  requirements of AASB 139 Financial Instruments: Recognition  and Measurement. Where they are carried at fair value,  gains and losses on remeasurement are recognised directly  in equity unless the financial assets have been designated  as being held at fair value through profit and loss, in which  case the gains and losses are recognised directly in the  income statement. The effective portion of changes in the fair value of derivatives  that are designated and qualify as cash flow hedges is  recognised in equity in the hedging reserve. The gain or loss  relating to the ineffective portion is recognised immediately  in the income statement within finance costs. Gains or  losses that are recognised in equity are transferred to the  income statement in the same year in which the hedged firm  commitment affects the net profit and loss, for example when  the future sale actually occurs. All financial liabilities other than derivatives are carried at  amortised cost. The Group uses derivative financial instruments such as  forward foreign currency contracts, and foreign currency and  interest rate swaps to hedge its risks associated with interest  rate and foreign currency fluctuations. Derivatives, including  those embedded in other contractual arrangements, are  initially recognised at fair value on the date a derivative  contract is entered into and are subsequently remeasured  to their fair value. The method of recognising the resulting  gain or loss depends on whether the derivative is designated  as a hedging instrument, and if so, the nature of the  item being hedged.  Hedge accounting is discontinued when the hedging  instrument expires or is sold, terminated or exercised, or  no longer qualifies for hedge accounting. At that point in  time, any cumulative gain or loss on the hedging instrument  recognised in equity is retained in equity until the forecasted  transaction occurs. If a hedged transaction is no longer  expected to occur, the net cumulative gain or loss recognised  in equity is transferred to the income statement. The measurement of the fair value of forward exchange  contracts is calculated by reference to current forward  exchange rates for contracts with similar maturity profiles.  The fair value of interest rate swap contracts is determined by  reference to market values for similar instruments. Hedges of a net investment in a foreign operation are  accounted for in a similar way to cash flow hedges. Gains or  losses on the hedging instrument relating to the effective  portion of the hedge are recognised directly in equity while  any gains or losses relating to the ineffective portion are  recognised in the income statement. On disposal of the  foreign operation, the cumulative value of such gains or losses  recognised directly in equity is transferred to the income  statement based on the amount calculated during the direct  method of consolidation. For the purposes of hedge accounting, hedges  are classified as: Changes in the fair value of derivatives that are designated  and qualify as fair value hedges are recorded in the income  statement, together with any changes in the fair value of the  hedged asset or liability that are attributable to the hedged  risk. Any gain or loss attributable to the hedged risk on  remeasurement of the hedged item is adjusted against the  Property, plant and equipment is recorded at cost less  accumulated depreciation and any accumulated impairment  losses. Directly attributable costs arising from the acquisition  or construction of fixed assets, including internal labour and  interest, are also capitalised as part of the cost. • Net investment hedges: hedges of the net investment in a  foreign operation. • Cash flow hedges: hedges of highly probable forecast  transactions; or • Fair value hedges: hedges of the fair value of recognised  assets or liabilities or a firm commitment; For derivatives that do not qualify for hedge accounting, any  gains or losses arising from changes in fair value are taken  directly to the income statement.