SECTION 9.2  General accounting  policies Consolidated financial statements SECTION 9: BASIS FOR PREPARATION 133 Carlsberg Group Annual Report 2013 Derivative financial instruments Hyperinflation foreign associates at the exchange rates at  the end of the reporting period, and on trans- lation of the share of profit/loss and other  comprehensive income for the year from  average exchange rates to the exchange  rates at the end of the reporting period, are  recognised in other comprehensive income  and attributed to a separate translation  reserve in equity. On complete or partial disposal of a foreign  entity or on repayment of balances which  constitute part of the net investment in the  foreign entity, the share of the cumula- tive amount of the exchange differences  recognised in other comprehensive income  relating to that foreign entity is recognised  in the income statement when the gain or  loss on disposal is recognised. Prior to translation of the financial state- ments of foreign entities in countries with  hyperinflation, the financial statements are  inflation-adjusted for changes in purchasing  power in the local currency. Inflation adjust- ment is based on relevant price indexes at  the end of the reporting period. The financial statements of foreign entities  whose functional currency is the currency of a hyperinflationary market are stated in terms  of the measuring unit current at the end of the  Derivative financial instruments are initially  recognised in the statement of financial  position at fair value on the trade date and  subsequently measured at fair value. At- tributable transaction costs are recognised  in the income statement. The fair values of derivative financial instru- ments are included in other receivables and  other payables, and positive and negative  values are offset only when the Group has the  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  comprehensive 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 non-financial as- set, the amount recognised in other compre- hensive income is transferred to the carrying  Changes in the fair value of derivative finan- cial instruments designated as and qualifying  for recognition as a fair value hedge of recog- nised 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. The gain/loss is recognised in other com- prehensive income. The gain/loss on the net monetary position is recognised as  financial income or expenses in the income  statement. Income statement items are  restated from the value on the transaction  date to the value on the reporting date  except for items related to non-monetary  assets, such as depreciation and amortisa- tion and consumption of inventories etc.  Deferred tax is adjusted accordingly. The  comparative figures for the Group are not  restated in terms of the measuring unit current at the end of the reporting period. reporting period using a general price index.  Non-monetary assets are restated to the cur- rent purchasing power at the reporting date  from the value on the date when they were  first recognised in the financial statements. right and the intention to settle several finan- cial instruments net. Fair values of derivative  financial instruments are computed on the  basis of current market data and generally  accepted valuation methods. amount of the asset when the non-financial  asset is recognised. Derivatives designated as and qualifying for  recognition as a cash flow hedge of financial  investments are recognised in other com- prehensive income. On complete or partial  disposal of the financial investment, 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. 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 associ- ates and which effectively hedge currency  fluctuations in these entities are recognised in  the consolidated financial statements in other  comprehensive income and attributed to a  separate translation reserve in equity. Embedded derivatives are recognised sepa- rately 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 instru-