SECTION 4.8  Financial instruments 4.8  ACCOUNTING POLICIES 4.8  SIGNIFICANT ACCOUNTING  ESTIMATES AND JUDGEMENTS Derivative financial instruments are initially recog- nised in the statement of financial position at fair  value on the trade date and subsequently measured  at fair value. Attributable transaction costs are  recognised in the income statement. When entering into financial instruments,  management assesses whether the instru- ment is an effective hedge of recognised  assets and liabilities, expected future  cash flows or financial investments. The  effectiveness of recognised hedge instru- ments is assessed at least quarterly. Any  ineffectiveness is recognised in the income  statement. non-financial asset, the amount recognised in other  comprehensive income is transferred to the carrying  amount of the asset when the non-financial asset  is recognised. Derivatives designated as and qualifying for recog- nition as a cash flow hedge of financial investments  are recognised in other comprehensive income. On  complete or partial disposal of the financial invest- ment, the portion of the hedging instrument that  is recognised in other comprehensive income and  relates to that financial investment is recognised  in the income statement when the gain or loss on  disposal is recognised. The fair values of derivative financial instruments  are included in other receivables and other paya- bles, and positive and negative values are offset  only when the Group has the right and the intention  to settle several financial instruments net. Fair val- ues of derivative financial instruments are computed  on the basis of current market data and generally  accepted valuation methods. Changes in the fair value of derivative financial in- struments designated as and qualifying for recogni- tion as a fair value hedge of recognised assets and  liabilities are recognised in the income statement,  together with changes in the value of the hedged  asset or liability with respect to the hedged portion.  Except for foreign currency hedges, hedging of  future cash flows according to a firm agreement is  treated as a fair value hedge of a recognised asset  or liability. For derivative financial instruments that do not  qualify for hedge accounting, changes in fair value  are recognised in the income statement as financial  income or financial expenses. Changes in the fair value of derivative financial  instruments used to hedge net investments in foreign  subsidiaries, joint ventures or associates and which ef- fectively hedge currency fluctuations in these entities  are recognised in other comprehensive income and at- tributed to a separate translation reserve in equity. Changes in the portion of the fair value of derivative  financial instruments which are designated and  qualify as a cash flow hedge and which effectively  hedge changes in the value of the hedged item  are recognised in other comprehensive income and  attributed to a separate reserve in equity. When  the hedged transaction results in gains or losses,  amounts previously recognised in other compre- hensive income are transferred to the same item  as the hedged item when the hedged risk impacts  the income statement. When the hedged item is a  Embedded derivatives are recognised separately  from the host contract and measured at fair value  if their economic characteristics and risks are not  closely related to those of the host contract, as a  separate instrument with the same terms would  meet the definition of a derivative, and the entire  combined instrument is not measured at fair value  through profit and loss. Separated embedded de- rivatives are subsequently measured at fair value. 103 Consolidated financial statements SECTION 4: FINANCING COSTS, CAPITAL STRUCTURE AND EQUITY Carlsberg Group Annual Report 2013