NOTE 10. FOREIGN EXCHANGE GAINS AND LOSSES
| Group | 2012 €'000 |
2011 €'000 |
|---|---|---|
| Foreign exchange translation gains on loans and receivables (Note 19) | 216,051 | 245,533 |
| Unrealised foreign exchange loss on derivative financial instruments | (61,708) | (291,633) |
| Realised foreign exchange (losses) / gains on currency derivative financial instruments | (255,374) | 111,093 |
| Foreign exchange gain / (loss) on cash | 1,467 | (3,221) |
| Other foreign exchange gains | 132 | 1 |
| Total foreign exchange (losses) / gains | (99,432) | 61,773 |
Gains and losses on foreign exchange derivatives arise from market movements that affect the value of the derivatives at the reporting date. On a cumulative basis since 2010, NAMA has recorded a loss of €15m on currency derivatives. This cumulative net cost is akin to an "insurance" cost of protecting NAMA from the impact of foreign exchange rate fluctuations.
Foreign exchange translation gains 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 2.5.
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.