Royal Botanic Gardens Victoria Annual Report 2018-19

7. RISKS, CONTINGENCIES AND VALUATION JUDGEMENTS
7.2 Fair value determination
Fair value determination requires judgement and the use of assumptions. This section discloses the most significant assumptions used in
determining fair values. Changes to assumptions could have a material impact on the results and financial position of the Board.
This section sets out information on how the Board determined fair value for financial reporting purposes. Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
The following assets and liabilities are carried at fair value:
h property, plant and equipment; and
h financial assets and liabilities measured at amortised cost.
The Board determines the policies and procedures for determining fair values for both financial and non-financial assets and liabilities as
required.
In determining fair values a number of inputs are used. To increase consistency and comparability in the financial statements, these inputs
are categorised into levels, also known as the fair value hierarchy.
How this section is structured
For those assets and liabilities for which fair values are determined, the following disclosures are provided:
h carrying amount and the fair value (which would be the same for those assets measured at fair value);
h which level of the fair value hierarchy was used to determine the fair value; and
h in respect of those assets and liabilities subject to fair value determination using Level 3 inputs:
– a reconciliation of the movements in fair values from the beginning of the year to the end; and
– details of significant unobservable inputs used in the fair value determination.
This section is divided between disclosures in connection with fair value determination for financial instruments (refer to Note 7.2.1) and
non-financial physical assets (refer to Note 7.2.2).
7.2.1 Fair value determination of financial assets and liabilities
The fair values and net fair values of financial assets and liabilities are determined according to the following fair value hierarchy:
h Level 1 – the fair value of financial instruments with standard terms and conditions and traded in active liquid markets is determined
with reference to quoted market prices; and
h Level 2 – the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability,
either directly or indirectly.
The Board currently holds a range of financial instruments that are recorded in the financial statements where the carrying amounts are a
reasonable approximation of fair value, either due to their short term nature or with the expectation that they will be paid in full by the end
of the 2018-19 reporting period.
These financial instruments include:
Financial assets
Financial liabilities
• Cash and deposits • Payables:
• Receivables: - For supplies and services
- Sale of goods and services - Other payables
- Grant receivables • Loan from TCV
- Accrued investment income
• Investments and other contractual financial assets:
- Term deposits
Where the fair value of the financial instruments is different from the carrying amounts, the following information has been included to
disclose the difference.
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Royal Botanic Gardens Board Victoria 2018-19 Financial Report Page 27