40. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) Unobservable inputs used in measuring fair value The following tables show the valuation techniques used in the determination of fair values within Level 3, as well as the key unobservable inputs used in the valuation models. (a) Financial instruments carried at fair value Type Valuation technique Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement Financial assets measured at FVOCI Net tangible assets Net tangible assets Higher net tangible assets results in higher fair value (b) Financial instruments not carried at fair value The following methods and assumptions are used to estimate the fair values of the following classes of financial instruments: (i) Other financial assets at amortised cost The fair values of securities that are actively traded is determined by quoted mid prices. For non-actively traded securities, the fair values are estimated using valuation techniques such as discounted cash flows analysis. Where discounted cash flows technique is used, the estimated future cash flows are discounted using applicable prevailing market or indicative rates of similar instruments at the reporting date. (ii) Financing and advances The fair values of variable rate financing are estimated to approximate their carrying values. For fixed rate financing, the fair values are estimated based on expected future cash flows of contractual instalment payments, discounted at applicable and prevailing rates at reporting date offered for similar facilities to new borrowers with similar credit profiles. In respect of impaired financing, the fair values are deemed to approximate the carrying values which are net of impairment allowances. (iii) Subordinated Sukuk Murabahah and Recourse obligations on financing sold to Cagamas The fair values of subordinated obligations are estimated by discounting the expected future cash flows using the applicable prevailing profit rates for borrowings with similar risk profiles. 41. CAPITAL COMMITMENTS Group and Bank 2021 RM’000 2020 RM’000 Property and equipment Contracted but not provided for in the financial statements 205,214 149,391 INTEGRATED ANNUAL REPORT 202 1 Key Messages Overview Value Creation MD&A Sustainability Leadership Accountability Financial Additional Information 359
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