axiata group berhad | annual report 2015
229
38. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
(e) Fair value estimation (continued)
The following table represents the fair value level of the financial assets and liabilities that are measured at fair value as at reporting date.
2015
2014
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
RM’000
Group
Assets
Financial assets at FVTPL:
- Trading securities
28
-
-
28
14
-
-
14
- Non-hedging derivatives
-
240,675
-
240,675
-
167,765
-
167,765
- Derivatives used for
hedging
-
101,807
-
101,807
-
-
-
-
Financial assets at AFS:
- Equity securities
-
-
31,286
31,286
-
-
1,118
1,118
Total assets
28
342,482
31,286
373,796
14
167,765
1,118
168,897
Liabilities
Financial liabilities at FVTPL:
- Non-hedging derivatives
-
(172,753)
-
(172,753)
-
(12,501)
-
(12,501)
- Derivatives used for
hedging
-
(1,102)
-
(1,102)
-
(13,726)
-
(13,726)
Total liabilities
-
(173,855)
-
(173,855)
-
(26,227)
-
(26,227)
(i) Financial instruments in level 1
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market is regarded
as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory
agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
(ii) Financial instruments in level 2
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined
by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as
little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is
included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in Level 3.
Specific valuation techniques used to value financial instruments include:
•
Quoted market prices or dealer quotes for similar instruments;
•
The fair value of cross currency interest rate swaps and interest rate swaps is calculated as the present value of the estimated future
cash flows based on observable market curves; and
•
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the reporting date, with the
resulting value discounted back to present value.
