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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Annual Report 2015 123
Notes to the consolidated financial statements
30 June 2015
4 Financial risk management (continued)
(d) Recognised fair value measurements (continued)
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
At 30 June 2015
Financial assets
Listed and unlisted investments
15,524
-
50
15,574
Derivative instruments
Commodity hedging contracts
-
4,981
-
4,981
15,524
4,981
50
20,555
Financial liabilities
Derivative instruments
Commodity hedging contracts
-
1,479
-
1,479
Foreign currency hedging contracts
-
1,622
-
1,622
-
3,101
-
3,101
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
At 30 June 2014
Financial assets
Listed and unlisted investments
808
-
50
858
Derivative instruments
Foreign currency hedging contracts
-
1,400
-
1,400
Commodity hedging contracts
-
1,777
-
1,777
808
3,177
50
4,035
Financial liabilities
Derivative instruments
Commodity hedging contracts
-
6,381
-
6,381
-
6,381
-
6,381
The Group did not measure any financial assets or financial liabilities at fair value on a non-recurring basis as at 30
June 2015 and did not transfer any fair value amounts between the fair value hierarchy levels during the year ended 30
June 2015.
(ii)
Valuation techniques used to determine level 1 fair values
The fair value of financial instruments traded in active markets (such as publicly traded derivatives and trading and
available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market
price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
(iii)
Valuation techniques used to determine level 2 and level 3 fair values
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives)
is determined using valuation techniques. These valuation techniques maximise the use of observable market data
where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value
an instrument are observable, the instrument is included in level 2.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Specific valuation techniques used to value financial instruments include:
• The use of quoted market prices or dealer quotes for similar instruments.
• The fair value of commodity and forward foreign exchange contracts is determined using forward commodity and
exchange rates at the reporting date.
• Other techniques, such as discounted cash flow analysis, are used to determine fair value for the remaining
financial instruments.
All of the resulting fair value estimates are included in level 2 except for unlisted equity securities which are included in
level 3.
Independence Group NL
59