― 68
18. Fair values
SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3 INPUTS) 2019 $M
SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2 INPUTS) 2019 $M
SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3 INPUTS) 2020 $M
SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2 INPUTS) 2020 $M
NOTE
Assets measured at fair value Derivative f inancial instruments Investment in private equity
220.4
–
20
109.3
–
– –
12.8 84.7 97.5
13.2
– –
15.6
Contingent consideration
5
–
Balance at 30 June
220.4
109.3
15.6
Liabilities measured at fair value Derivative f inancial instruments
104.9 104.9
– –
20
83.1 83.1
– –
Balance at 30 June
Policies
The table above provides the fair value measurement hierarchy of the group’s assets and liabilities that are measured at fair value. The group estimates all fair values using the discounted cash flows method. All assets and liabilities for which fair value is measured and disclosed in the f inancial statements are categorised within the fair value hierarchy, described as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; or Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); or Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Fair value is calculated using the discounted cash flowmethod, estimated using observable interest yield curves and/or foreign exchange market prices. The carrying values of the financial instruments are the fair values excluding any interest receivable or payable, which is separately presented in the balance sheet in other receivables or other payables. Fair value is calculated using the discounted cash flow method. In estimating the fair value, the group made assumptions on unobservable inputs, including, amongst others, forecasted future cash flows, an appropriate discount rate and terminal growth rate. The fair value considers the expected impact of COVID-19 within the forecasted future cash flows. The impact has not been signif icant. Fair value is calculated using the discounted cash flow method. The group made assumptions on unobservable inputs including amongst others, future raw gas volume from the Kapuni gas f ield, future LPG prices, future oil prices, foreign exchange rates, and an appropriate discount rate. Further details on the inputs are as follows: — Future raw gas volume from the Kapuni gas f ield is based on published forecasts from the Ministry of Business, Innovation and Employment; — Future LPG prices are based on an independent f inancial institution’s commodity price forecasts; — Future oil prices are based on S&P Capital IQ forecast data; — Future foreign exchange rates are based on an independent f inancial institution’s foreign exchange rate forecasts; and — Discount rate of 8%, representing market discount rates as applicable to the remaining life of the Kapuni gas f ield. The impact of COVID-19 was largely reflected in the commodity prices used in calculating the initial fair value at 31 March 2020. Movement since initial recognition reflects movements in market inputs as mentioned above and are not COVID-19 related.
Derivative f inancial instruments
Investment in private equity
Contingent consideration
THE INTERPLAY OF TODAY AND TOMORROW
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