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BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
ANNUAL REPORT 2013
26. FAIR VALUE (CONTINUED)
For financial assets and financial liabilities that are liquid or have short term maturity, it is assumed that the carrying amounts
approximate their fair value. These include cash resources, other assets and liabilities. The fair value of debt securities is based on
quoted prices where available, or otherwise based on an appropriate yield curve with the same remaining term to maturity. The fair
value of loans and advances largely approximates carrying value as the Group’s portfolio comprises mainly variable rate loans. The fair
value of deposits takes account of certain fixed rate deposits which have been discounted at current interest rates.
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position are
shown in the below table:
2013
2012
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
Cash resources
$ 117,433,453
117,433,453
102,900,958
102,900,958
Financial investments
21,694,747
21,726,048
17,870,327
17,825,317
Loans and advances
774,614,499
774,614,499
749,729,372
749,729,372
Other assets
5,017,755
5,017,755
3,901,623
3,901,623
$ 918,760,454
918,791,755
874,402,280
874,357,270
2013
2012
Carrying
Carrying
Amount
Fair Value
Amount
Fair Value
Deposits
$ 772,320,340
833,023,789
735,909,041
792,665,652
Loans payable
74,476,147
78,593,976
80,100,530
87,416,765
Reimbursable shares
5,726,048
5,726,048
4,532,147
4,532,147
Other liabilities
11,407,220
11,407,220
9,855,048
9,855,048
$ 863,929,755
928,751,033
830,396,766
894,469,612
Determination of fair value and fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1:
quoted (unadjusted) prices in active markets for identical assets or liabilities.
The fair value of financial instruments traded in active markets is based on quoted market prices at the statement of financial
position date. A market is regarded as active 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. The quoted market price used for financial assets held by the Group is the current bid price. These
instruments are included in level 1.
Level 2:
other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either
directly or indirectly.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is
available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are
observable, the instrument is included in level 2.
Level 3:
techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable
market data.
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
Notes to the Consolidated Financial Statements
For the year ended March 31, 2013, with comparative figures for 2012
(Expressed in Barbados dollars)
