Living with volatility

Three months after the new International Financial Reporting Standards came into effect, European companies are waiting to see how the rules will be received by investors and analysts. Duncan Wood reports

On page 35 of food manufacturer Nestlé’s latest annual report, there’s one of those dry, bloodless sentences that is the corporate accountant’s stock-in-trade. On this occasion, though, it was probably written with gritted teeth and a smarting sense of injustice.

The sentence sits at the bottom of a table showing Nestlé Group’s derivatives liabilities, and states that “some derivatives, while complying with the group’s financial risk management policies of managing the risks of the volatility of