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notes tothe
financial statements
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STARHILL global reit ANNUAL REPORT FY 2016/17
Measurement of fair values
Financial derivatives
The fair values of financial derivatives are estimated based on banks’ quotes. These quotes are largely tested for
reasonableness by discounting estimated future cash flows based on terms and maturity of each contract and using
market rates for a similar instrument at the measurement date.
Other financial assets and liabilities
The carrying amounts of financial 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.
Other non-derivative financial liabilities are measured at fair value at initial recognition and for disclosure purposes,
at each reporting date. Fair value is calculated based on the present value of future principal and interest cash flows,
discounted at the market rate of interest at the measurement date. Other non-derivative financial liabilities include
interest-bearing borrowings and trade and other payables.
Fair value hierarchy
The different levels of the fair value hierarchy have been defined as follows:
·
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).
·
Level 3:
inputs for the asset or liability that are not based on observable market data (unobservable inputs).