Basic HTML Version
92
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APN
annual report
2011
notes to the financial statements
APN News & Media Limited and Controlled Entities
33. FINANCIAL RISK MANAGEMENT (continued)
(d) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 7
Financial Instruments: Disclosures
requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:
–
– Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
–
– Level 2
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices)
or indirectly (derived from prices).
–
– Level 3
Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table presents the Group’s financial assets and liabilities measured and recognised at fair value at 31 December 2011 and
31 December 2010.
31 December 2011
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Assets
Financial assets at fair value through profit or loss
Listed securities
7,636
–
–
7,636
Shares in other corporations
–
–
23,528
23,528
Total assets
7,636
–
23,528
31,164
Liabilities
Financial liabilities at fair value through equity
Derivatives used for hedging
–
(4,617)
–
(4,617)
Total liabilities
–
(4,617)
–
(4,617)
31 December 2010
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total
$’000
Assets
Financial assets at fair value through profit or loss
Listed securities
5,305
–
–
5,305
Shares in other corporations
–
–
20,867
20,867
Financial assets at fair value through equity
Derivatives used for hedging
–
1,016
–
1,016
Total assets
5,305
1,016
20,867
27,188
Liabilities
Financial liabilities at fair value through profit or loss
Trading derivatives
(248)
–
–
(248)
Financial liabilities at fair value through equity
Derivatives used for hedging
–
(2,695)
–
(2,695)
Total liabilities
(248)
(2,695)
–
(2,943)
The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based on quoted market
prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price. These
instruments are included in level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using
valuation techniques. The Group uses a variety of methods, including discounted cash flow models, and makes assumptions that are based
on market conditions existing at the end of each reporting period. Assumptions used in the discounted cash flow models are consistent with
those used in the Group’s impairment review. The fair value of interest rate swaps is calculated as the present value of the estimated future
cash flows.
The fair value of forward exchange contracts is determined using forward exchange market rates at the end of the reporting period. These
instruments are included in level 2 and comprise debt investments and derivative financial instruments.
The carrying amounts of trade receivables and payables are assumed to approximate their fair values due to their short-term nature. The fair
value of current borrowings approximates the carrying amount, as the impact of discounting is not significant.