Page 15 - TreasuryChinaTrust

Treasury China Trust Annual Report 2010 82

NOTES TO THE FINANCIAL STATEMENTS

Period from 19 May 2010 (date of constitution) to 31 December 2010

27 Estimation of fair values (Continued)

Non-current financial assets and liabilities

Fair value is calculated using discounted cash flow models, with the discount rate determined based on benchmark rates for instruments with similar maturity and repricing plus a credit spread. In determining the applicable credit spread, reasonable efforts have been made to determine whether there has been a change in the credit risk associated with the financial asset or financial liability.

Fair values versus carrying amounts

The carrying amounts of the Group’s financial instruments carried at cost or amortised cost are

Fair value hierarchy

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

• 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 (i.e., as prices) or indirectly (i.e., derived from prices)

• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Level 1 Level 2 Level 3 Total Group $’000 $’000 $’000 $’000

As at 31 December 2010

Available-for-sale financial asset – – 15,783 15,783 Derivative financial asset – 55 – 55

– 55 15,783 15,838

28 Related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Trustee-Manager or Group and the party are subject to common control. Related parties may be individuals or other entities.

Other than those disclosed elsewhere in the financial statements, there were the following significant related party transactions for the period from 19 May 2010 (date of constitution) to 31 December 2010 based on agreed terms:

Period from 19/5/2010 to 31/12/2010 $’000

Trustee-Manager’s fees paid/payable 6,425 Property management fees paid/payable 2,648

9,073