NOTES TO THE FINANCIAL STATEMENTS
FOR THE FInAncIAL yEAR EnDED 30 JunE 2016
30
FINANCIAL INSTRUMENTS (CONT’D)
c)
Fair values of financial assets and financial liabilities
Fair value of financial instruments by classes that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value
The carrying amounts of the current financial assets and liabilities recorded in the consolidated financial
statements of the Group and the statement of financial position of the Company approximate their
respective fair values due to their short-term nature or they are floating rate instruments that are re-
priced to market interest rates on or near the end of the reporting period.
The carrying amounts of non-current bank borrowings, finance lease liabilities and structured deposits
approximate their fair values as these financial instruments either bear interest rates which approximate
either the market interest rates at the reporting date or are floating rate loans that are repriced to market
interest rates on or near the end of the reporting period. These fair value measurement for disclosure
purpose are categorised in Level 3 of the fair value hierarchy.
Assets measured at fair value
Fair value hierarchy
The Group and Company classifies fair value measurement using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
– Level 1
– Quoted prices (unadjusted) in active markets for identical assets or liabilities;
–
Level 2
–
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); and
–
Level 3
–
Inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
Assets not carried at fair value but fair values are disclosed
Level 2 fair value measurements
The held-to-maturity corporate bonds (quoted and unquoted) is classified as Level 2.
The fair value of the held-to-maturity corporate bonds are determined using quoted market prices in less
active markets.
Level 3 Fair value measurements
The held-to-maturity structured deposit is classified as Level 3.
The fair value of the held-to-maturity structured deposit is computed based on the effective interest rate
for structured deposit as at the reporting date.
There is no movement in Level 3 assets and liabilities measured at fair value during the year.
107
ISOTEAM LTD.
ANNUAL REPORT 2016
