EXCEL FORCE MSC BERHAD Annual Report 2020

EXCEL FORCE MSC BERHAD - ANNUAL REPORT 2020 78 NOTES TO THE FINANCIAL STATEMENTS 31 DECEMBER 2020 (CONT’D) 3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) (s) Fair value measurement Fair value of an asset or a liability is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer of the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair value is categorised into different levels in a fair value hierarchy based on the input used in the valuation technique as follows: Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date. Level 2 : inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 : unobservable inputs for the asset or liability The Group recognises transfers between levels of the fair value hierarchy as of the date of the event or change in circumstances that caused the transfers.