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DANONE Consolidated financial statements 2019 50 
The Group is also exposed to price volatility and to a potential shortage of the commodities that it purchases, mainly to produce its 
finished products. This policy, as well as the impact of a pri
ce change in the two main commodity categories on the Group’s annual cost 
of purchases, is presented in Note 6.7 of the Notes to the consolidated financial statements. 
Note 13.2. Accounting principles 
Derivatives are recognized in the consolidated balance sheet at their fair value: 
• 
derivatives used to manage net debt and hedges of net investments in foreign operations are recognized in Derivatives assets 
or liabilities; 
• 
foreign exchange and raw materials derivatives related to operations are recognized in the heading (i) Other accounts 
receivable in Derivatives - assets or within (ii) Other current liabilities in Derivatives - liabilities. 
When derivatives are designated as fair value hedges of assets or liabilities in the consolidated balance sheet, changes in the fair value 
of both the derivatives and the hedged items are recognized in profit or loss in the same period. 
When derivatives are designated as hedges of net investments in foreign operations, changes in the fair value of the derivatives are 
recognized in equity under Translation adjustments and are recycled as income (expense) when the asset is derecognized. 
When derivatives are designated as future cash flow hedges: 
• 
changes in the value of the effective portion are recognized in equity under Accumulated other comprehensive income and 
are recycled to profit or loss, in the same heading, when the hedged item itself is recognized in profit or loss; 
• 
time value (swap points, currency option premium and basis spread of cross-currency swaps) is recognized in equity in Other 
comprehensive income and taken to profit or loss on expiry of the underlying instrument, in accordance with the principles 
adopted by the Group. As a reminder, derivatives designated as future cash flow hedges are recognized in accordance with 
the transaction-related principle (hedging of transactions included in the forecasts). 
Changes in the fair value of the ineffective portions of derivatives that meet the conditions for classification as hedging instruments and 
changes in the fair value of derivative financial instruments that do not meet the conditions for classification as hedging instruments are 
recognized directly in profit or loss for the period, in a heading within operating income or financial income depending on their nature. 
Note 13.3. Derivatives