Notes to the Financial Statements
(Cont’d)
For the financial year ended 30 April 2016
(In Singapore Dollar)
ANNUAL REPORT 2016
DRIVING IT UP
| 107
37.
Fair value of financial instruments (cont’d)
(a)
Fair value of financial instruments that are carried at fair value (cont’d)
Note
Quoted prices
in active
markets for
identical
instruments
(Level 1)
Significant
other
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
$’000
$’000
$’000
Company
2016
Financial liabilities
Forward currency contracts
18
–
(39)
–
2015
Financial liabilities
Forward currency contracts
18
–
(3)
–
Fair value hierarchy
The Group classify fair value measurement using a fair value hierarchy that reflects the significance
of the inputs used in making the measurements. The fair value hierarchy have the following levels:
l
Level 1
– Quoted prices (unadjusted) in active markets for identical assets or liabilities
l
Level 2
– Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived
from prices), and
l
Level 3
– Inputs for the asset or liability that are not based on observable market data
(unobservable inputs)
Determination of fair value
Forward currency contracts and interest rate swaps are valued using a valuation technique with
market observable inputs. The most frequently applied valuation techniques include forward pricing
and swap models, using present value calculations. The models incorporate various inputs including
the foreign exchange spot and forward rates, interest rate curves and forward rate curves.
