42. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) Bills and acceptance payable The estimated fair values of bills and acceptance payables with maturity of less than six months approximate their carrying values. For bills and acceptance payable with maturities of six months or more, the fair values are estimated based on discounted cash flows using prevailing market rates for borrowings with similar risk profiles. Fair value hierarchy MFRS 13 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources and unobservable inputs reflect the Group’s market assumptions. The fair value hierarchy is as follows: Level 1 – Q uoted price (unadjusted) in active markets for the identical assets or liabilities. This level includes listed equity securities and debt instruments. Level 2 – 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). This level includes profit rate swaps and structured debt. The sources of input parameters include BNM indicative yields or counterparty credit risk. Level 3 – Inputs for asset or liability that are not based on observable market data (unobservable inputs). This level includes equity instruments and debt instruments with significant unobservable components. The table below analyses financial instruments carried at fair value and those not carried at fair value for which fair value is disclosed, together with their fair values and carrying amounts shown in the statement of financial position. The table does not include those short-term/on demand financial assets and financial liabilities where the carrying amounts are reasonable approximation of their fair values. Group 31 December 2023 RM’000 Fair value of financial instruments carried at fair value Fair value of financial instruments not carried at fair value Level 3 Total fair value Carrying amount Level 1 Level 2 Level 3 Total Financial assets Financial assets at FVTPL – 1,215,769 – 1,215,769 – 1,215,769 1,215,769 Derivative financial assets – 68,412 – 68,412 – 68,412 68,412 Financial assets at FVOCI 6,317 12,430,426 83,465 12,520,208 – 12,520,208 12,520,208 Financial assets at AC – – – – 3,107,799 3,107,799 3,120,230 Financing, advances and others – – – – 70,406,543 70,406,543 66,817,115 Financial liabilities Derivative financial liabilities – 56,548 – 56,548 – 56,548 56,548 Recourse obligations on financing sold to Cagamas – – – – 2,029,840 2,029,840 2,004,329 Subordinated sukuk and capital securities – – – – 2,306,829 2,306,829 2,323,540 393 1 2 3 4 5 6 7 8 9 www.bankislam.com FINANCIAL STATEMENTS
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