146
COSCO Corporation (Singapore) Limited
Annual Report 2015
NOTES TO THE
FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
Financial Statements
33. Financial risk management
(continued)
(e)
Fair value measurements
(continued)
There were no transfers between levels 1 and 2 during the year.
The fair value of financial instruments traded in active markets (such as trading and available-for-
sale securities) is based on quoted market prices at the balance sheet date. The quoted market
price used for financial assets held by the Group is the current bid price. These instruments are
included in Level 1.
The fair value of financial instruments that are not traded in an active market (for example, over-
the-counter derivatives) is determined by using valuation techniques. The Group uses a variety of
methods and makes assumptions that are based on market conditions existing at each balance
sheet date. The fair value of forward foreign exchange contracts is determined using quoted
forward currency rates at the balance sheet date. These investments are classified as Level
2. In infrequent circumstances, where a valuation technique for these instruments is based on
significant unobservable inputs, such instruments are classified as Level 3.
The carrying amount less impairment provision of trade receivables and payables are assumed
to approximate their fair values. The fair value of financial liabilities for disclosure purposes is
estimated based on quoted market prices or dealer quotes for similar instruments by discounting
the future contractual cash flows at the current market interest rate that is available to the Group
for similar financial instruments. The carrying amounts of current borrowings approximates their
fair values.
(f)
Financial instruments by category
The carrying amount of the different categories of financial instruments is as disclosed on the face
of the balance sheet and in Note 17 to the financial statements, except for the following:
The Group
The Company
2015
2014
2015
2014
$’000
$’000
$’000
$’000
Loans and receivables
6,513,762
5,637,305
81,737
77,575
Financial liabilities at amortised
cost
8,592,095
7,075,241
17,497
17,378
(g)
Offsetting financial assets and financial liabilities
The financial assets and liabilities of the Group and the Company are not subject to enforceable
master netting arrangements or similar agreement. Financial assets and liabilities are settled on a
gross basis.
