Wah Seong Corporation Berhad Annual Report 2018

47 FAIR VALUES OF FINANCIAL INSTRUMENTS The carrying amounts of financial assets and liabilities classified within current assets and current liabilities respectively approximate their fair values due to the relatively short term nature of these financial instruments. Fair value of quoted equity instruments and debts securities are determined by reference to their respective published market bid price as at 31 December 2018. The fair values of forward exchange contracts are estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract using a risk-free interest rate. The fair values of interest rate swaps is determined by using valuation techniques based on observable market data. Fair values of non-derivative financial liabilities are calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the end of the reporting period. The carrying amount of financial liabilities measured at amortised cost approximates their respective fair values. Fair value hierarchy The table below summarises all financial instruments carried at fair value as at 31 December 2018 and 31 December 2017, based on a hierarchy that reflects the significance of the inputs used in measuring its respective fair values. The levels are defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical financial assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the financial asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices). Level 3: Inputs for the financial asset or liability that are not based on observable market data (unobservable inputs). Level 1 Level 2 Level 3 Total Group RM’000 RM’000 RM’000 RM’000 2018 Financial assets Investment in equity instruments 6 - - 6 Derivative financial assets - 146 - 146 Short term investments - 609 - 609 6 755 - 761 2017 Financial assets Available-for-sale financial assets 10 - - 10 Derivative financial assets - 94 - 94 Short term investments - 18,862 - 18,862 10 18,956 - 18,966 Company 2018 Financial assets Short term investments - 609 - 609 2017 Financial assets Short term investments - 18,862 - 18,862 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2018 WAH SEONG CORPORATION BERHAD 174