Financial Report Template (Page 65 of 80) in pdf

Financial Report Template Page 65

NOTES TO THE FINANCIAL STATEMENTS

(CONT)

FOR THE YEAR ENDED 30 JUNE 2015

NOTE 32 FINANCIAL RISK MANAGEMENT CONT.

Fair value approximates carrying amounts for the following financial assets and liabilities:

(i) Cash and cash equivalents, trade and other receivables and trade and other payables are short-term instruments in nature whose

carrying amounts are equivalent to their fair values.

(ii) The carrying amount of the Group’s lease liabilities and the hire purchase liabilities and bank debt approximate their fair values, as

commercial rates of interest are paid and the impact of discounting is not significant.

(iii) The carrying amount of the Group’s deferred consideration approximates its fair value due to the timing of the acquisition and

settlement of deferred payments.

NOTE 33 FAIR VALUE MEASUREMENTS

The Group measures and recognises the following assets and liabilities at fair value on a recurring basis after initial recognition of:

• obligations for contingent consideration arising from business combinations.

The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.

(a) Fair value hierarchy

AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value

measurements into one of three possible levels based on the lowest level that an input that is significant to the measurement can

be categorised into as follows:

Level 1

Level 2

Level 3

Measurements based on quoted prices

Measurements based on inputs other than

Measurements based on unobservable

(unadjusted) in active markets for identical

quoted prices included in Level 1 that are

inputs for the asset or liability.

assets or liabilities that the entity can

observable for the asset or liability, either

access at the measurement date.

directly or indirectly.

The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques.

These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to

measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on

observable market data, the asset or liability is included in Level 3.

(b) Valuation techniques

The fair value of the contingent consideration in the business combinations is determined by performance forecasts which are used

to estimate future cash flows. These cash flows are discounted back to a present fair value amount using the applicable discount rate.

The following tables provide the fair values of the Group’s assets and liabilities measured and recognised on a recurring basis after

initial recognition and their categorisation within the fair value hierarchy.

Financial Report Template Page 65