Page 162 - ar2011

160 TRANS FORMATION
NOTES TO THE FINANCIAL STATEMENTS
For the Financial Year Ended 31 December 2011
42 FAIR VALUE OF FINANCIAL INSTRUMENTS (cont’d)
A. Fair value of financial instruments that are carried at fair value (cont’d)
Determination of fair value
Quoted equity instruments (note 20):Fair value is determined by direct reference to their bid price quotations
in an active market at the end of the reporting period.
Unquoted equity instruments (note 20):These investments are valued using valuation models which uses both
observable and non-observable data. The non-observable inputs to the models include assumptions regarding
the future financial performance of the investee, its risk profile, and economic assumptions regarding the
industry and geographical jurisdiction in which the investee operates.
Derivatives (note 21): Foreign currency forward contracts and interest rate swap contracts are valued using
a valuation technique with market observable inputs. These contracts are valued by financial institutions.
Movements in level 3 financial instruments measured at fair value
The following table presents the reconciliation for all financial instruments measured at fair value based on
significant unobservable inputs (level 3).
Assets measured at fair value based on Level 3
Group
Available-for-sale financial asset
Equity instrument (unquoted)
2011
$’000
2010
$’000
At 1 January 2011 14,387 –
Purchases – 14,387
Impairment (6,786) –
Exchange adjustment (359) –
At 31 December 2011 7,242 14,387