MISC BERHAD - Annual Report 2014 p 282 34. Fair value disclosures (cont’d.) Fair value information (cont’d.) Transfers between Level 1 and Level 2 fair values There has been no transfers between Level 1 and Level 2 fair values during the financial year. Level 1 fair value measurements Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical assets that the entity can assess at the measurement date. Level 2 fair value measurements Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the asset either directly or indirectly. The following are descriptions of the valuation techniques and inputs used in the fair value measurement for assets and liabilities that are categorised within Level 2 of the fair value hierarchy: Derivatives Interest rate swap contracts and forward exchange contracts 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 credit quality of counterparties, foreign exchange spot and forward rates, interest rate curves and forward rate curves. Non-derivative financial liabilities The fair value of the loan and borrowings which is determined for disclosure purposes is calculated by discounting expected future cash flows at the market rate of interest at the end of the reporting period. Level 3 fair value measurements Level 3 fair value is estimated using unobservable inputs that are not based on observable market data. NOTESTOTHE FINANCIAL STATEMENTS - 31 December 2014
RkJQdWJsaXNoZXIy NDgzMzc=