BUILDING LANDMARKS, CHARTING GROWTH
195
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
2 BASIS OF PREPARATION
(continued)
2.4 Use of estimates and judgements
(continued)
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
Information about critical judgement in applying accounting policies that have the most significant effect on the amounts
recognised in the financial statements is included in the following notes:
Note 4 – Acquisition of equity interest: business combination and asset acquisition
Note 10 – Classification of properties under development
Information about assumptions and estimation uncertainties that have a significant risk of resulting in material adjustment
within the next financial year are included in note 7 – Impairment test: key assumptions underlying recoverable amounts.
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The management regularly reviews significant unobservable inputs and valuation adjustments. Third party information,
such as property valuations, broker quotes or pricing services, that is used to measure fair values, is assessed and
documented to support the conclusion that such valuations meet the requirements of FRS, including the level in the fair
value hierarchy in which such valuations should be classified.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation
techniques as follows:
•
Level 1:
quoted prices (unadjusted) in active markets for identical assets or liabilities.
•
Level 2:
inputs other than quoted prices included in 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).
If the inputs used to measure the fair value of an asset or a liability is categorised into different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement (with Level 3 being the lowest).
The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during
which the change has occurred.
Further information about the assumptions made in measuring fair values is included in the following notes:
Note 4 – Acquisitions
Note 5 – Investment properties
Note 15 – Share-based payment arrangements
Note 26 – Financial instruments
