202 | CapitaLand Limited Annual Report 2014
Appendix
Notes to the Financial Statements
Year ended 31 December 2014
33 FINANCIAL RISK MANAGEMENT
(cont’d)
H 2IIVHWWLQJ ÀQDQFLDO DVVHWV DQG ÀQDQFLDO OLDELOLWLHV
(cont’d)
Net
amount
$’000
Line item in the
balance sheet
Carrying
amount
in the
balance
sheet
$’000
Financial
assets not
in scope of
offsetting
disclosures
$’000 Note
The Company
2014
7\SHV RI ÀQDQFLDO DVVHWV
Amount due from
subsidiaries,
Trade and other
current account
33,525
receivables
341,427
307,902
12
2013
7\SHV RI ÀQDQFLDO DVVHWV
Amount due from
subsidiaries,
Trade and other
current account
21,139
receivables
1,100,375 1,079,236
12
34 FAIR VALUE OF ASSETS AND LIABILITIES
(a) Determination of fair value
The following valuation methods and assumptions are used to estimate the fair values of the following
signimcant classes of assets and liabilities
(i) Derivatives
Forward foreign exchange contracts, cross currency swap contracts and interest rate swap contracts
are valued using valuation techniques with market observable inputs. The most frequently applied
valuation techniques include forward pricing and swap models, using present valuation calculations.
The models incorporate various inputs including the credit quality of counterparties, foreign exchange
spot and forward rate, interest rate curves and forward rate curves.
LL
1RQ GHULYDWLYH ÀQDQFLDO OLDELOLWLHV
Fair value, which is determined for disclosure purposes, is calculated based on the present value of
future principal and interest cash nows, discounted using the market rate of interest at the reporting
date. In respect of the liability component of convertible bonds, the fair value at initial recognition is
determined using a market interest rate of similar liabilities that do not have a conversion option.
LLL 2WKHU ÀQDQFLDO DVVHWV DQG OLDELOLWLHV
The fair value of quoted securities is their quoted bid price at the balance sheet date. The carrying
amounts of mnancial assets and liabilities with a maturity of less than one year (including trade and other
receivables, cash and cash equivalents and trade and other payables) are assumed to approximate
their fair values because of the short period to maturity. All other mnancial assets and liabilities are
discounted to determine their fair values.
Where discounted cash flow techniques are used, estimated future cash flows are based on
management’s best estimates and the discount rate is a market-related rate for a similar instrument in
the balance sheet.
