ANNUAL REPORT 2012 - Wawasan TKH Holdings Berhad

088
WAWASAN TKH HOLDINGS BERHAD (540218-A)
ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTS
31 DECEMBER 2012 (cont’d)
26. FINANCIAL INSTRUMENTS (cont’d)
(d) Methods and assumptions used to estimate fair values
The fair values of financial assets and financial liabilities are determined as follows:
(i) Financial instruments that are not carried at fair values and whose carrying amounts are a reasonable
approximation of fair values
The carrying amounts of financial assets and financial liabilities, such as trade and other receivables,
trade and other payables and borrowings, are reasonable approximation of fair values, either due to
their short-term nature or that they are floating rate instruments that are re-priced to market interest
rates on or near the end of the reporting period.
(ii) Obligations under finance lease
The fair values of these financial instruments are estimated by discounting expected future cash flows
at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at
the end of the reporting period.
(iii) Derivatives
The fair value of a forward foreign exchange contract is the amount that would be payable or
receivable upon termination of the outstanding position arising and is determined by reference
to the difference between the contracted rate and the forward exchange rate as at the end of the
reporting period applied to a contract of similar amount and maturity profile.
(e) Fair value hierarchy
The following table provides an analysis of financial instruments that are measured subsequent to
initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value
is observable.
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
Level 3 fair value measurements are those derived from inputs for the asset or liability that are not based
on observable market data (unobservable inputs).
As at 31 December 2012, the Group held the following financial instruments carried at fair value on the
statement of financial position:
Liabilities measured at fair values
Financial liabilities at fair value
through profit or loss
- Forward currency contracts
Total
RM’000
23
Level 1
RM’000
As at 31 December 2011, the Group held the following financial instruments carried at fair value on the
statement of financial position:
-
Level 2
RM’000
23
Level 3
RM’000
-
Assets measured at fair values
Financial assets at fair value
through profit or loss
- Forward currency contracts
Total
RM’000
14
Level 1
RM’000
-
Level 2
RM’000
14
Level 3
RM’000
-
Liabilities measured at fair values
Financial liabilities at fair value
through profit or loss
- Forward currency contracts
Total
RM’000
46
Level 1
RM’000
-
Level 2
RM’000
46
Level 3
RM’000
-
There were no transfers between Level 1 and Level 2 fair value measurements during the financial years
ended 31 December 2012 and 31 December 2011.