Download Full Report - Ascendas REIT
Download Full Report - Ascendas REIT
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Notes to the financial statements<br />
29. Fair value of financial instrumentS<br />
The following summarises the significant methods and assumptions used in estimating the fair values of financial<br />
instruments of A-<strong>REIT</strong>:<br />
Derivatives financial instruments<br />
The fair value of interest rate swaps are based on valuations provided by the financial institutions that are<br />
the counterparties to the transactions. These quotes are tested for reasonableness by discounting estimated<br />
future cash flows based on the terms and maturity of each contract and using market interest rates for a similar<br />
instrument at the measurement date.<br />
Term loans and short term borrowings<br />
The carrying amounts of interest-bearing borrowings which are repriced within 3 months from the balance sheet<br />
date approximate the corresponding fair values.<br />
Medium term notes<br />
The fair values of the medium term notes were obtained from market quotes. The carrying amount and fair value<br />
as at 31 March 2010 are as follows:<br />
Carrying<br />
amount<br />
$’000<br />
31 March 2010<br />
Fair<br />
value<br />
$’000<br />
Medium term notes 274,350 283,345<br />
There was no medium term note issued in the previous financial year.<br />
Collateral loan<br />
The fair value of the collateral loan approximates the fair value of the ECS issued by Ruby Assets, which is<br />
used as a proxy for the purpose of determining the fair value of the collateral loan as the key features of the<br />
two instruments are identical. Valuation adjustments, if significant, are made to account for the differences in<br />
features between the collateral loan and the ECS. The fair value of the ECS was obtained from market quotes.<br />
Other financial assets and liabilities<br />
The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and<br />
other receivables, cash and cash equivalents, and trade and other payables) are assumed to approximate their<br />
fair values because of the short period to maturity. All other financial assets and liabilities approximate their fair<br />
values as at balance sheet date.<br />
154 <strong>Ascendas</strong> real estate investment trust
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