Entire Document - Chris Hani District Municipality

carrying values. Fixed interest-rate instruments are fair valued based on the presentvalue of future principal and interest cash flows, discounted at the market rate ofinterest at the reporting date.Trade and Other Receivables/PayablesThe Fair Value of Trade and Other Payables is estimated at the present value offuture cash flows.The management of the municipality is of the opinion that the carrying value ofTrade and Other Receivables recorded at amortised cost in the Annual FinancialStatements approximate their fair values. The Fair Value of Trade Receivableswere determined after considering the standard terms and conditions of agreementsentered into between the municipality and other parties as well as the the currentpayment ratio’s of the municipality’s debtors.Other Financial Assets and LiabilitiesThe Fair Value of Other Financial Assets and Financial Liabilities (excluding DerivativeInstruments) is determined in accordance with generally accepted pricing modelsbased on discounted cash flow analysis using prices from observable current markettransactions and dealer quotes for similar instruments.Chapter 4Long-term LiabilitiesThe Fair Value of Long-term Liabilities was determined after considering the standardterms and conditions of agreements entered into between the municipality and therelevant financing institutions.Management considers the carrying amounts of Financial Assets and FinancialLiabilities recorded at amortised cost in the Annual Financial Statements toapproximate their Fair Values on 30 June 2011, as a result of the short-term maturityof these assets and liabilities.Assumptions used in determining Fair Value of Financial Assets and FinancialLiabilitiesThe table below analyses Financial Instruments carried at Fair Value at the endof the reporting period by the level of fair-value hierarchy as required by IFRS 7.The different levels are based on the extent to which quoted prices are used in thecalculation of the Fair Value of the Financial Instruments. The levels have beendefined as follows:Level 1:-Fair Values are based on quoted market prices (unadjusted) in active markets for anidentical instrument.193