Where are all hedging instruments presented on Petro Stopping Center's balance sheet?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
All hedging instruments are presented within derivative financial instruments on the balance sheet and are categorized within level 2 of the fair value hierarchy. Ineffectiveness arising on fair value hedges is included within finance costs in the income statement.
The tables below summarize the carrying amount, and the accumulated fair value adjustments included within the carrying amount, of the hedged items designated in fair value hedge relationships.
Source: Item 14 — Other investments (FDD pages 131–208)
What This Means (2025 FDD)
According to Petro Stopping Center's 2025 Franchise Disclosure Document, all hedging instruments are presented within derivative financial instruments on the balance sheet. These instruments are categorized within level 2 of the fair value hierarchy. The hedged item for all fair value hedges is presented within finance debt on the balance sheet.
For prospective franchisees, this means that Petro Stopping Center uses financial instruments (hedges) to manage risks, and these are accounted for as derivatives on the company's balance sheet. The categorization within level 2 of the fair value hierarchy suggests that the fair value of these instruments is determined using observable market data.
Furthermore, any ineffectiveness arising on fair value hedges is included within finance costs in the income statement. This indicates that if the hedging strategy does not perfectly offset the risk, the resulting gains or losses are reflected in the company's finance costs. The disclosure also mentions that the nominal amount of hedging instruments at December 31, 2024 and 2023 relating to highly probable forecast sales matures within 12 months of the relevant balance sheet date.