Serba Dinamik Annual Report 2019

310 2019 ANNUAL REPORT FINANCIAL STATEMENTS SERBA DINAMIK HOLDINGS BERHAD 29. FINANCIAL INSTRUMENTS (CONTINUED) 29.4 Fair value information (continued) Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. Level 1 fair value Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilities that the entity can access at the measurement date. Level 2 fair value Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the financial assets or liabilities, either directly or indirectly. Non-derivative financial liabilities Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. Transfers between Level 1 and Level 2 fair values There has been no transfer between Level 1 and Level 2 fair values during the financial year. Level 3 fair value Level 3 fair value is estimated using observable inputs for the financial assets and liabilities. The table in ensuing page shows the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models. Financial instruments not carried at fair value Description of valuation Type technique and input used Term loans and finance lease Discounted cash flow using a rate liabilities based on the current market rate of borrowing of the respective Group entities at the reporting date. N O T E S T O T H E F I N A N C I A L S TAT E M E N T S