REPUBLIC BANK LIMITED
104
Notes to theConsolidatedFinancial Statements
For the year ended September 30, 2014. Expressed in thousands of Trinidad and Tobago dollars ($’000), except where otherwise stated
23 Fair value
(continued)
23.2 Fair value and fair value hierarchies
23.2.1 Determination of fair value and fair value hierarchies
The Group uses the following hierarchy for determining and disclosing the fair value of investment securities by valuation
techniques:
Level 1
Included in the Level 1 category are financial assets and liabilities that are measured in whole or in part by reference to published
quotes in an activemarket. A financial instrument is regarded as quoted in an activemarket if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual
and regularly occurring market transactions on an arm’s length basis.
Level 2
Included in the Level 2 category are financial assets and liabilities that are measured using a valuation technique based on
assumptions that are supported by prices from observable current market transactions and for which pricing is obtained via
pricing services, but where prices have not been determined in an active market. This includes financial assets with fair values
based on broker quotes, investments in private equity funds with fair values obtained via fund managers and assets that are valued
using the Group’s own models whereby the majority of assumptions are market observable.
Level 3
Included in the Level 3 category are financial assets and liabilities that are not quoted as there are no active markets to determine
a price. These financial instruments are held at cost, being the fair value of the consideration paid for the acquisition of the
investment, and are regularly assessed for impairment.
The following table shows the fair value measurement hierarchy of the Group’s assets and liabilities as at September 30, 2014.
Level 1
Level 2
Level 3
Total
2014
Financial assets measured at fair value
Investment securities
3,437,232
4,814,325
8,825
8,260,382
Financial assets for which
fair value is disclosed
Advances
–
27,258,579
–
27,258,579
Financial liabilities for which
fair value is disclosed
Customers’current, savings and
deposit accounts
–
43,774,832
–
43,774,832
Debt securities in issue
–
1,244,434
–
1,244,434
23.2.2 Transfers between Level 1 and 2
For the year ended September 30, 2014, no assets were transferred between Level 1 and Level 2.
