11. Foreign Exchange Gains and Losses
| Group | Note | 2014 €’000 |
2013 €’000 |
|---|---|---|---|
| Foreign exchange translation gains / (losses) on loans and receivables | 19 | 288,967 | (193,043) |
| Unrealised foreign exchange (losses) / gains on derivative financial instruments | (104,494) | 208,206 | |
| Realised foreign exchange losses on currency derivative financial instruments | (208,145) | (104,623) | |
| Foreign exchange gains on cash | 862 | 172 | |
| Other foreign exchange gains / (losses) | 1,176 | (48) | |
| Total foreign exchange gains and losses | (21,634) | (89,336) |
Foreign exchange translation gains and losses on loans and receivables arise on the revaluation of foreign currency denominated loans and receivables. Foreign currency translation amounts are recognised in accordance with accounting policy 2.15.
Gains and losses on foreign exchange derivatives arise from market movements that affect the value of the derivatives. On a cumulative basis since 2010, NAMA has recorded a loss on foreign exchange derivatives, which is offset by a foreign exchange translation gain on loans and receivables, resulting in a cumulative net loss of €126m (2013: €104m) on foreign exchange. This cumulative cost is akin to an “insurance” cost of protecting NAMA from the impact of foreign exchange rate fluctuations.
Following the transfer of assets from Participating Institutions, the Group entered into currency derivatives to reduce its exposure to exchange rate fluctuations arising on foreign currency denominated loans and receivables acquired. The gain or loss on derivative products comprises realised and unrealised gains and losses. Realised and unrealised gains are recognised in accordance with accounting policy 2.15. Currency derivatives are explained in more detail in Note 18.