BP 2011 Annual Report Download - page 226

224 BP Annual Report and Form 20-F 2011
Notes on financial statements
32. Trade and other payables
$ million
2011 2010
Current Non-current Current Non-current
Financial liabilities
Trade payables 29,830 –27,510 –
Amounts payable to jointly controlled entities 1,578 1,047 1,361 1,905
Amounts payable to associates 876 159 712 220
Gulf of Mexico oil spill trust fund liabilitya4,872 –5,002 9,899
Other payables 10,510 1,779 8,100 1,790
47,666 2,985 42,685 13,814
Non-financial liabilities
Other payables 4,739 452 3,644 471
52,405 3,437 46,329 14,285
a See Note 2 for further information.
Trade and other payables are predominantly interest free, however the Gulf of Mexico oil spill trust fund liability is recorded on a discounted basis. See
Note 26 for further information.
http://www.bp.com/downloads/dfi
33. Derivative financial instruments
An outline of the group’s financial risks and the objectives and policies pursued in relation to those risks is set out in Note 26.
In the normal course of business the group enters into derivative financial instruments (derivatives) to manage its normal business exposures in
relation to commodity prices, foreign currency exchange rates and interest rates, including management of the balance between floating rate and fixed
rate debt, consistent with risk management policies and objectives. Additionally, the group has a well-established entrepreneurial trading operation that is
undertaken in conjunction with these activities using a similar range of contracts.
IAS 39 prescribes strict criteria for hedge accounting, whether as a cash flow or fair value hedge or a hedge of a net investment in a foreign
operation, and requires that any derivative that does not meet these criteria should be classified as held for trading and fair valued, with gains and losses
recognized in the income statement.
The fair values of derivative financial instruments at 31 December are set out below.
$ million
2011 2010
Fair
value
asset
Fair
value
liability
Fair
value
asset
Fair
value
liability
Derivatives held for trading
Currency derivatives 217 (217) 194 (280)
Oil price derivatives 823 (536) 1,099 (877)
Natural gas price derivatives 5,305 (3,603) 5,350 (3,951)
Power price derivatives 843 (663) 561 (432)
7,188 (5,019) 7,204 (5,540)
Embedded derivatives
Commodity price contracts –(1,417) 18 (1,625)
Other embedded derivatives – – –(89)
–(1,417) 18 (1,714)
Cash flow hedges
Currency forwards, futures and cylinders 25 (159) 134 (124)
Cross-currency interest rate swaps – – 101 (1)
25 (159) 235 (125)
Fair value hedges
Currency forwards, futures and swaps 842 (398) 772 (80)
Interest rate swaps 840 –337 (74)
1,682 (398) 1,109 (154)
8,895 (6,993) 8,566 (7,533)
Of which – current 3,857 (3,220) 4,356 (3,856)
– non-current 5,038 (3,773) 4,210 (3,677)