NTUC Income AR 2019

NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 4. MANAGEMENT OF INSURANCE AND FINANCIAL RISKS (CONTINUED) (f) Fair value measurements (continued) 2018 Level 1 $’000 Level 2 $’000 Level 3 $’000 Total $’000 Assets Investments designated at fair value through profit or loss – Equities 4,910,958 21 – 4,910,979 – Funds 2,360,311 – – 2,360,311 – Debt securities 22,545,127 14,627 801 22,560,555 Available-for-sale investments – Equities 73,398 – 43,242 116,640 – Funds 96,501 – 1,935,472 2,031,973 – Debt securities 630,041 – – 630,041 30,616,336 14,648 1,979,515 32,610,499 – Derivative financial instruments 4,700 125,549 – 130,249 30,621,036 140,197 1,979,515 32,740,748 Liabilities – Derivative financial instruments (5,202) (62,349) – (67,551) The fair value of Level 1 financial instruments, which are traded in active markets (such as trading and available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the Group is the last traded price for equity investments and bid prices for fixed income investments. The fair value of Level 2 financial instruments, which are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Quoted market prices or dealer quotes for similar instruments are used to estimate fair value for long-term debt for disclosure purposes. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the reporting date. In infrequent circumstances, where a valuation technique for these instruments is based on significant unobservable inputs, such instruments are included in Level 3. 92 HERE FOR SURE