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Axiata Group Berhad | Annual Report 2016
FINANCIAL STATEMENTS
236
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2016
39. 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.
2016
2015
Level 1
RM’000
Level 2
RM’000
Level 3
RM’000
Total
RM’000
Level 1
RM’000
Level 2
RM’000
Level 3
RM’000
Total
RM’000
Group
Assets
Financial assets at FVTPL:
- Trading securities
18
-
-
18
28
-
-
28
- Non-hedging derivatives
-
177,777
-
177,777
-
240,675
-
240,675
- Derivatives used for
hedging
-
223,276
-
223,276
-
101,807
-
101,807
Financial assets at AFS:
- Equity securities
-
62,675
1,250
63,925
-
-
31,286
31,286
Total assets
18 463,728
1,250 464,996
28 342,482
31,286 373,796
Liabilities
Financial liabilities at FVTPL:
- Non-hedging derivatives
- (1,322,430)
- (1,322,430)
-
(172,753)
-
(172,753)
- Derivatives used for
hedging
-
(6,077)
-
(6,077)
-
(1,102)
-
(1,102)
Total liabilities
- (1,328,507)
- (1,328,507)
-
(173,855)
-
(173,855)
(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.
(iii) Financial instruments in level 3
The movement of the financial instruments in level 3 has no material impact to the results of the consolidated financial statements.