Notes to the Financial Statements Note 12: Equity and Reserves continued 21 P rior to acquisition close in August 2022, the Group commenced buying Vifor’s shares on-market. These shares were carried at fair value through OCI and the subsequent fair value gain was transferred to retained earnings on acquisition date. (b) Movement in Reserves Share-based payments reserve (i) Foreign currency translation reserve (ii) Hedge reserve (iii) Other reserves (iv) Total US$m 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Opening balance 544 427 (81) 206 134 – (7) – 590 633 Share-based payment expense, net of tax 138 117 – – – – – – 138 117 Net exchange gains/(losses) on translation of foreign subsidiaries, net of hedging reserve – – (17) (287) – – – – (17) (287) Acquisition of CSL Vifor (Note 2)21 – – – – – – (7) (7) (7) (7) Change in fair value of investments valued through OCI – – – – – – (42) – (42) – Fair value of cash flow hedge – – – – – 135 – – – 135 Reclassification to profit and loss – – – – (14) (1) – – (14) (1) Closing balance 682 544 (98) (81) 120 134 (56) (7) 648 590 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 OCI 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 the prior year ended 30 June 2022. iv. Other reserves The Group has elected to recognise changes in the fair value of the investments in publicly traded securities through OCI (excluding dividend income) (Note 11(e)). These changes are accumulated within the other reserves. The Group transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised (or triggered by a change of control including the acquisition of CSL Vifor). CSL Limited Annual Report 2022/23 146
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