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) Valuation techniques and inputs used in Level 3 fair value measurements The following table presents the valuation techniques and key inputs that were used to determine the fair value of investments categorised under Level 3 of the fair value hierarchy which involves significant unobservable inputs: 2019 Fair value $’000 Classification Valuation technique Unobservable Input Assets Debt securities 700 FVPL (a) Dealers’ Quotes Default / recovery / prepay / liquidity assumptions Unquoted funds 2,202,227 AFS (b) Net Asset Value Net asset value of investment vehicles Unquoted equities 44,952 AFS (b) Net Asset Value Net asset value of investment entities Total 2,247,879 2018 Fair value $’000 Classification Valuation technique Unobservable Input Assets Debt securities 801 FVPL (a) Dealers’ Quotes Default / recovery / prepay / liquidity assumptions Unquoted funds 1,935,472 AFS (b) Net Asset Value Net asset value of investment vehicles Unquoted equities 43,242 AFS (b) Net Asset Value Net asset value of investment entities Total 1,979,515 (a) FVPL denotes financial instruments classified as fair value through profit or loss (b) AFS denotes financial instruments classified as available-for-sale Valuation processes of the Group Valuation of debt securities classified as Level 3 assets is determined based on quotes from dealers, adjusted for liquidity provision. These securities are currently in the process of being wound down. Valuation of unquoted funds were based on net asset value reports as at 30 September 2019, adjusted for the net cash flows movement from 1 October 2019 until 31 December 2019. Valuation of unquoted equities that are co-operatives were valued at cost based on their realisable values as set out in the By-laws. Other unquoted equities were valued based on net asset value from their latest management accounts. 94 HERE FOR SURE