FRASERS HOSPITALITY TRUST ANNUAL REPORT 2015
185
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL PERIOD FROM 20 JUNE 2014 (DATE OF CONSTITUTION) TO 30 SEPTEMBER 2015
27.
FAIR VALUE OF ASSETS AND LIABILITIES (CONT’D)
(b)
Classifications and fair values
The following table shows an analysis of each class of assets and liabilities measured at fair value at the
end of the reporting period:
Fair value
Carrying
amount
Level 2
Level 3
Total
Total
At 30 Sep 2015
$’000
$’000
$’000
$’000
FHT and FH-REIT Group
Financial assets
Currency forward contracts
196
–
196
196
Interest rate swaps
6,599
–
6,599
6,599
Cross-currency swap
2,032
–
2,032
2,032
8,827
–
8,827
8,827
Non-financial assets
Investment properties
– 1,960,393 1,960,393 1,960,393
Financial liabilities
Currency forward contracts
(484)
–
(484)
(484)
(c)
Level 2 fair value measurements
Foreign currency forward contracts, interest rate swaps and cross-currency swap are valued using
present value calculations by applying market observable inputs existing at each reporting date into
forward pricing and swap models. The models incorporate various inputs including the credit quality of
counterparties, foreign exchange spot and forward rates, interest rate curves and forward rate curves.
(d)
Level 3 fair value measurements
(i)
Information about significant unobservable inputs
The valuation techniques used in the level 3 fair value measurements are disclosed in the Portfolio
Statement.
The information table presents the valuation techniques and key inputs that were used to determine
the fair value of investment properties categorised under Level 3 of the fair value hierarchy.
Valuation techniques Key unobservable inputs
Range of unobservable
inputs
Relationship of unobservable
inputs to fair value
Discounted cash
flow analysis
– Discount rate
6.25% – 11.00% The estimated fair values
vary inversely against the
discount rate.
– Capitalisation rate
4.00% – 8.25% The estimated fair values
vary inversely against the
capitalisation rate.
Gross realisation
method
Direct comparison
approach
Transacted price
of comparable
properties $5,175
to $17,167 psm
The estimated fair values
with different adjustment
factors used.
