DAYANG ENTERPRISE HOLDINGS BHD
(712243-U)
|
Annual Report
2015
136
32. Financial instruments (cont’d)
32.4 Fair value information (cont’d)
Policy on transfer between levels
The fair value of an asset to be transferred between levels is determined as of the date of the event
or change in circumstances that caused the transfer.
Level 1 fair value
Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial
assets or liabilities that the entity can access at the measurement date.
Level 2 fair value
Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are
observable for the financial assets or liabilities, either directly or indirectly.
Derivatives
The fair value of interest rate swap is estimated by discounting the net cash flows between the
floating interest payable and the fixed interest receivable over the tenure of the swap using a risk-
free interest rate (based on government bonds).
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of
future principal and interest cash flows, discounted at the market rate of interest at the end of the
reporting period.
Transfers between Level 1 and Level 2 fair values
There has been no transfer between Level 1 and 2 fair values during the financial year (2014: no
transfer in either directions).
Level 3 fair value
Level 3 fair value is estimated using unobservable inputs for the financial assets and liabilities.
Fair values of financial instruments not carried at fair value
Inter-relationship
between significant
Significant
unobservable inputs
Valuation
unobservable
and fair value
Type
technique
inputs
measurement
Group
Term loans
Discounted
Interest rate
The estimated fair value
cash flows
of 5.75%
would increase/(decrease)
(2014: 5.23%)
if the interest rate
were (lower)/higher.
Notes to the
Financial Statements
(cont’d)
