Directors' Report - Alibaba

37 FINANCIAL RISK MANAGEMENT (Continued)
(f) Fair value estimation
The fair values of the Group’s financial assets and financial liabilities are determined as follows:
• The fair value of the listed investments traded in active liquid markets are determined with reference to the published
price quotations;
• The fair values of financial instruments that are not traded in active market are made with reference to amounts as
determined by discounted cash flow valuation techniques; and
• The carrying amounts of the Group’s financial assets and financial liabilities measured by discounting the future
contractual cash flows at the current market interest rate that is available to the Group for similar financial
instruments approximate their fair value.
The fair values of the Group’s financial assets and liabilities are not materially different from their carrying value.
The following table provides an analysis of available-for-sale investments that are measured subsequent to initial recognition
at fair value, grouped into levels based on the degree to which the fair value is observable.
• Level 1 (highest level): fair values measured using quoted prices (unadjusted) in active markets for identical financial
instruments
• Level 2: fair values measured using quoted prices in active markets for similar financial instruments, or using valuation
techniques in which all significant inputs are directly or indirectly based on observable market data
• Level 3 (lowest level): fair values measured using valuation techniques in which any significant input is not based on
observable market data
Group
Fair value measurement as of December 31, 2010
Level 1 Level 2 Level 3 Total amount
RMB’000 RMB’000 RMB’000 RMB’000
Debt securities in the PRC, at fair
value (Note 19) – 325,862 – 325,862
38 SUBSEQUENT EVENTS
In November 2010, the Group entered into an agreement to acquire a 65% equity interest in Shenzhen One-Touch Enterprise
Service Limited (“One-Touch”), a provider of one-stop import and export services to small and medium enterprises in China. The
transaction was completed in January 2011 and the first instalment of the purchase consideration was paid. The second and
third instalment of the consideration will be paid in 2012 and 2014 and will be adjusted based on the operating and financial
performance of One-Touch in 2011 and 2013. The Group is in the process of assessing the fair value of the assets and liabilities
acquired with an external valuer.
In January 2011, the Group purchased a 25% equity interest in Sinosoft Technology Group Ltd (“Sinosoft”). Sinosoft, through
its wholly-owned subsidiary, Nanjing Skytech, develops and provides export VAT refund software products and related services in
China. The transaction was completed and the consideration was paid in January 2011.
39 COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform to the presentation of current year.
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Alibaba.com Limited Annual Report 2010