25. Derivative Financial Instruments

The fair values of derivative financial instruments are analysed by year of maturity and by accounting designation as follows:


	Fair value hedges $m		Cash flow hedges $m		Net investment hedges $m		Not designated as hedges $m		Total $m
At 31 December 2021

Derivative assets

Within one year - current assets		-		36		1		2		39

Between one and two years		20		1		-		-		21

Between three and four years		32		-		-		-		32

After five years		44		-		-		-		44
Non-current assets		96		1		-		-		97

Total derivative assets		96		37		1		2		136

Derivative liabilities

Within one year - current liabilities		-		(2)		(10)		(2)		(14)

Total derivative liabilities		-		(2)		(10)		(2)		(14)

Net asset/(liability) arising on derivative financial instruments		96		35		(9)		-		122

The equivalent disclosure for the prior year is as follows:

At 31 December 2020

Derivative assets

Within one year - current assets		-		7		8		2		17

Between one and two years		-		1		-		-		1

Between two and three years		32		-		-		-		32

Between four and five years		74		-		-		-		74

After five years		77		-		-		-		77
Non-current assets		183		1		-		-		184

Total derivative assets		183		8		8		2		201

Derivative liabilities

Within one year - current liabilities		-		(6)		(2)		(4)		(12)

Between one and two years - non-current liabilities		-		(1)		-		-		(1)

Total derivative liabilities		-		(7)		(2)		(4)		(13)

Net asset/(liability) arising on derivative financial instruments		183		1		6		(2)		188

At 31 December 2021 and 2020, the Group had no master netting or similar arrangements, no collateral posting requirements, or enforceable right of

set-off

agreements with any of its derivative counterparts.

Fair value hedges consist of interest rate swaps. These instruments hedge risks arising from changes in asset/liability fair values due to interest rate movements.

Cash flow hedges consist of currency forwards, currency swaps and commodity swaps. These instruments hedge risks arising to future cash flows from movements in foreign exchange rates and commodity prices. Cash flow hedges are expected to affect profit and loss over the period to maturity.

Net investment hedges comprise of currency forwards and currency swaps and hedge changes in the value of net investments due to currency movements.

The profit/(loss) arising on fair value hedges, cash flow hedges, and related hedged items reflected in the Consolidated Income Statement is shown below:


	2021 $m		2020 $m		2019 $m
Fair value hedges and related hedged items

Movement in cumulative fair value of the hedge adjustment of hedge instruments		(85)		97		72

Movement in cumulative fair value of the hedge adjustment of hedged items		87		(83)		(71)

Components of other comprehensive income - cash flow hedges

Gains/(losses) arising during the year:

- commodity swaps		34		(2)		30

- currency forwards		-		9		(3)

Total		34		7		27


Fair value hierarchy	2021 Level 2 $m		2020 Level 2 $m
Assets measured at fair value

Fair value hedges - interest rate swaps		96		183

Cash flow hedges - currency forwards, currency swaps and commodity swaps		37		8

Net investment hedges - currency forwards and currency swaps		1		8

Not designated as hedges (classified as held for trading) - currency forwards and currency swaps		2		2
Total		136		201

Liabilities measured at fair value

Cash flow hedges - currency forwards, currency swaps and commodity swaps		(2)		(7)

Net investment hedges - currency forwards and currency swaps		(10)		(2)

Not designated as hedges (classified as held for trading) - currency forwards and currency swaps		(2)		(4)
Total		(14)		(13)

At 31 December 2021 and 2020 there were no derivatives valued using Level 1 or Level 3 fair value techniques.