Measurement of Fair Values

The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.

Level 2 and level 3 instruments

Level 3 instruments

Type

Valuation technique

Significant unobservable inputs

Inter-relationship between significant unobservable inputs and fair value measurement

Financial instrument measured at fair value

Interest rate swaps

Income approach −
Present value technique

Not applicable

Not applicable

Forward currency contracts

Income approach −
Present value technique

Not applicable

Not applicable

Financial instrument not measured at fair value

Loans to joint ventures and associates

Income approach −
Present value technique
  • Forecast revenues
  • Risk-adjusted discount rate (1%-7%)

The estimated fair value would increase (decrease) if:

  • the revenue was higher (lower)
  • the risk-adjusted discount rate was lower (higher)

Finance lease receivables

Income approach −
Present value technique
  • Forecast revenues
  • Risk-adjusted discount rate (5%-9%)

The estimated fair value would increase (decrease) if:

  • the revenue was higher (lower)
  • the risk-adjusted discount rate was lower (higher)

Loans and borrowings

Income approach −
Present value technique

Not applicable

Not applicable

Other long-term debt

Income approach −
Present value technique

Not applicable

Not applicable