94
GHL Systems Berhad
(293040-D)
NOTES TO THE FINANCIAL STATEMENTS
31 December 2014 (continued)
6. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
6.3 Key sources of estimation uncertainty (continued)
(i) Fair values of borrowings
The fair values of borrowings are estimated by discounting future contractual cash flows at the
current market interest rates available to the Group for similar financial instruments. Sensitivity
analysis of the effects of interest rate risk has been disclosed in Note 36 to the financial statements.
(j) Fair value measurement
The financial and non-financial assets and liabilities that are measured subsequent to initial
recognition at fair value are grouped into Level 1 to Level 3 based on the degree to which the
fair value inputs are observable.
(i) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in
active markets for identical assets or liabilities;
(ii) Level 2 fair value measurements are those derived from inputs other than quoted prices
included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
(iii) Level 3 fair value measurements are those derived from inputs for the asset or liability that
are not based on observable market data (unobservable inputs).
The classification of an item into the above levels is based on the lowest level of the inputs
used in the fair value measurement of the item. Transfers of items between levels are
recognised in the period they occur.
The Group measures financial instruments at fair value, as disclosed in Note 35 to the
financial statements.
