| 2.2.7 | Derivative financial instruments and hedge operations |
The Company uses derivative instruments to protect its operations against the risk of fluctuations in foreign exchange and interest rates; they are not used for speculative purposes.
Gains and losses on derivative transactions are recorded monthly in profit or loss, taking into account the realizable value of these instruments (market value). The provision for unearned gains and losses is recognized in the statement of financial position under derivative financial instruments, and the counterpart in profit and loss under financial income (expense), net, (Note 34), except for operations to hedge exposure to changes in exchange rate or designated as hedge accounting.
Embedded derivatives are separated from their host contracts and are measured at their fair values provided they meet the definition of a derivative.