Al-`Aqar Healthcare REIT Annual Report 2019

Al-`Aqar Healthcare REIT 06 FINANCIAL STATEMENT 131 Notes To The Financial Statements For The Financial Year Ended 31 December 2019 (Continued) A liability is classified as current when it is: (i) expected to be settled in the normal operating cycle; (ii) held primarily for the purpose of trading; (iii) it is due to be settled within twelve months after the end of the reporting period; or (iv) there is no unconditional right to defer the settlement of the liability for at least twelve months after the end of the reporting period. All other liabilities are classified as non-current. 3.15 Fair value measurement The Group and the Fund measure financial instruments such as derivatives at fair value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: • in the principal market for the asset or liability; • in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group and the Fund. The fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group and the Fund use calculation techniques that are appropriate in the circumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; • Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and • Level 3 inputs are unobservable inputs for the asset or liability. 3. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 3.14 Current versus non-current classification (Continued)