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38. Fair value hierarchy and financial instruments by category
Accounting policies have been applied to financial instruments as indicated below.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using another
valuation technique. In estimating the fair value of an asset or a liability, the group takes into account the characteristics of the asset
or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement
date.
In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to which
the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its
entirety. The three levels are explained as follows:
Level 1 – inputs are quoted prices in active markets for identical assets or liabilities that the company can access at the measurement
date. These quoted prices are unadjusted.
Level 2 – inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or
indirectly.
Level 3 – inputs are unobservable inputs for the asset or liability.
The table below categorises financial instruments and analyses those measured at fair value by the level into which the fair value
measurement is categorised.
Group
Recurring fair value measurements
Assets
Loans and
receivables
at amortised
cost
R000
Assets
designated
at fair value
through
profit and loss
R000
Level 1
R000
Level 2
R000
Level 3
R000
30 June 2015
Derivative instruments
(1)
53 132
53 132
Loans receivable
2 311 882
Receivables
87 152
Cash and cash equivalents
83 841
30 June 2014
Derivative instruments
(1)
32 978
32 978
Loans receivable
859 945
Receivables
103 686
Cash and cash equivalents
77 353
(1)
Refer to note 19 for revaluation techniques and key inputs
145
Hyprop Investments Limited
Integrated Report 2015