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The parent entity and its controlled entity are parties to derivative financial instruments in the normal course of business in order to hedge exposures to foreign exchange and interest rate changes. 

The economic entity retails products that have been imported from South East Asia. In order to protect against exchange rate movements, the economic entity has entered into forward exchange rate contracts to purchase USD. The contracts are timed to mature in line with forecasted payments for imports and cover forecast purchases for the coming 3 months on a rolling basis. 

At balance date the following amounts were committed on foreign currency forward exchange contracts: 

Buy United States dollars and sell Australian dollars with maturity 

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These forward exchange contracts are hedging future purchases and unrealised gains and losses on the contracts, together with the costs of the contracts, are deferred and will be recognised in the measurement of the underlying transaction provided the underlying contract is still expected to occur as originally designated. 

Gains and losses arising from hedging contracts terminated prior to maturity are also carried forward until the designated hedged transaction occurs. 

The following gains, losses and costs have been deferred as at the balance date: 

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(a) Included in other creditors under Note 17 

(b) Included in sundry debtors under Note 8 

