Notes to the Financial Statements Note 12: Equity and Reserves continued (b) Movement in Reserves Share-based payments reserve (i) Foreign currency translation reserve (ii) Hedge reserve (iii) Other reserves (iv) Total US$m 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Opening balance 426.7 328.7 206.5 7.6 – – – – 633.2 336.3 Share-based payment expense 116.8 91.8 – – – – – – 116.8 91.8 Net exchange gains/(losses) on translation of foreign subsidiaries, net of hedging reserve – – (286.9) 198.9 – – – – (286.9) 198.9 Change in fair value of investments valued through OCI – – – – – – (6.6) – (6.6) – Fair value of cash flow hedge – – – – 134.7 – – – 134.7 – Reclassification to profit and loss – – – – (1.0) – – – (1.0) – Deferred tax 0.1 6.2 – – – – – – 0.1 6.2 Closing balance 543.6 426.7 (80.4) 206.5 133.7 – (6.6) – 590.3 633.2 Nature and purpose of reserves i. Share-based payments reserve The share-based payments reserve is used to recognise the fair value of awards issued to employees. ii. Foreign currency translation reserve Where the functional currency of a subsidiary is not US dollars, its assets and liabilities are translated on consolidation to US dollars using the exchange rates prevailing at the reporting date, and its profit and loss is translated at average exchange rates. All resulting exchange differences are recognised in other comprehensive income and in the foreign currency translation reserve in equity. Exchange differences arising from borrowings designated as hedges of net investments in foreign entities are also included in this reserve. iii. Hedge reserve The hedge reserve recognises the effective portion of gains and losses on derivatives that are designated and qualify as hedges. Amounts are subsequently reclassified into the profit and loss as appropriate. The hedge reserve includes the cash flow hedge reserve associated with the T-lock which settled during 30 June 2022 (refer to Note 3). iv. Other reserves Other reserves includes equity securities purchased in connection with the acquisition of Vifor (refer to Note 2 and Note 11(e)). The Group has elected to recognise changes in the fair value of these investments in equity securities in OCI (excluding dividend income). These changes are accumulated within the other reserves within equity. The Group transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised. CSL Limited Annual Report 2021/22 126
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