Company: BBVXF
Filing Date: 2025-07-31
Form Type: 6-K
Source: 0000842180-25-000033
Chunk: 100

Company: BANCO BILBAO VIZCAYA ARGENTARIA, S.A.
Filing Date: 2025-07-31
Form: 6-K
Chunk 100
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ually specified component of a debt instrument (e.g., inflation-linked bonds).

For these economic hedges to be recognized as hedge accounting, they must meet certain requirements established under both IAS 39 and IFRS 9. These requirements include clear identification of the hedged items and hedging instruments, an assessment of the hedge's effectiveness over time, and adequate documentation supporting the Group’s intention to manage its risk through these instruments. Only when these criteria are met can financial derivatives be accounted for as hedge accounting, allowing for an accounting treatment that more accurately reflects the Group’s risk management strategy (see Note 14).

Hedge accounting maintains a similar recording scheme under both IAS 39 and IFRS 9. Hedge ineffectiveness, defined as the difference between the change in value of the hedging instrument and the hedged item in each period, attributable to the hedged risk, is recorded in the consolidated income statement (or other comprehensive income, if the hedging instrument hedges an equity instrument for which an entity has elected to present changes in fair value in other comprehensive income) (see Notes 14 and 35).

<div align='center'>F-15</div>

Under IAS 39, hedge effectiveness is assessed both retrospectively and prospectively, ensuring that it remains within a range of 80% to 125%. However, IFRS 9 eliminates the strict 80%-125% effectiveness range requirement, allowing qualitative prospective assessments if there is an economic relationship between the hedged item and the hedging instrument, and credit risk does not exert a dominant effect on changes in the value of either the hedged item or the hedging instrument. BBVA has chosen to continue applying the 80%-125% effectiveness range as a measure for assessing hedge effectiveness, and may rebalance the hedge without discontinuing hedges if this range is not maintained, as described below.

The variations that occur, after the designation of the hedge, in the valuation of the financial instruments designated as hedged items and the financial instruments designated as accounting hedging instruments, are recorded as follows:

– In fair value hedges, the differences in the fair value of the derivative and the hedged instrument attributable to the hedged risk are recognized directly under "Gains (losses) from hedge accounting, net" in the consolidated income statement (or other comprehensive income, if the hedging instrument hedges an equity instrument for which an entity has elected to present changes in fair value in other comprehensive income), using as a counterpart the consolidated balance