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Gamuda Berhad (29579-T) • Annual Report 2012
43. Fair value of financial instruments (cont’d.)
The following methods and assumptions are used to estimate fair values of the following classes of financial
instruments:
(i)
Quoted investment in an associated company and short term investments
Fair value is determined directly by reference to their published market bid price at the reporting date.
(ii)
Non-current receivables and non-current borrowings
The fair value of these financial instruments are estimated by discounting expected future cash flows at market
incremental lending rate for similar types of lending or borrowing arrangements as the reporting date.
(iii) Receivables, cash and bank balances and current payables
The carrying amounts of these financial assets and liabilities 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 reporting date.
(iv)
Current borrowings
The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair
values due to the insignificant impact of discounting.
The fair value measurement hierarchies used to measure financial assets and financial liabilities carried at fair value
in the statement of financial position as at 31 July 2012 are as follows:
(a)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b)
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. prices) or indirectly (i.e. derived from prices).
(c)
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
NoTES To ThE FINANCIAL STATEMENTS
31 July 2012