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annual report | 2012 Gunung Capital Berhad (330171-P)<br />
94<br />
NOTES TO THE FINANCIAL STATEMENTS (cont’d)<br />
31 DECEMBER 2012<br />
39 FAIR VALUE OF FINANCIAL INSTRUMENTS (cont’d)<br />
Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of<br />
fair value<br />
The following are classes of financial instruments that are not carried at fair value and whose carrying amounts are<br />
reasonable approximation of fair value:<br />
Note<br />
Trade receivables 10<br />
Other receivables 11<br />
Amount owing by / (to) subsidiaries 12<br />
Trade payables 20<br />
Other payables 21<br />
Finance lease and hire purchase payables 17<br />
Shareholder’s advance 18<br />
Bank borrowings 22<br />
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values due to their<br />
relatively short-term nature.<br />
Finance Lease and Hire Purchase Payables<br />
The fair values of these financial instruments are determined by discounting the relevant cash flows using interest rates<br />
of similar instruments as at the end the reporting period.<br />
Group Company<br />
Carrying<br />
amount<br />
2012<br />
RM<br />
Fair value<br />
2012<br />
RM<br />
Carrying<br />
amount<br />
2011<br />
RM<br />
Fair value<br />
2012<br />
RM<br />
Financial liabilities<br />
Finance lease and hire purchase payables 41,558,083 44,358,722 53,421,325 53,691,608<br />
Unquoted Equity Instruments<br />
It is not practical to estimate the fair value of the Group’s investment in unquoted shares because of the lack of quoted<br />
market prices and the variability to estimate fair value. However, the management believes that the carrying amount<br />
represents the recoverable value.<br />
Financial Guarantees<br />
Fair value is determined based on probability weighted discounted cash flow method. The probability has been estimated<br />
and assigned for the following key assumptions:<br />
(i) The likelihood of the guaranteed party defaulting within the guaranteed period;<br />
(ii) The exposure on the portion that is not expected to be recovered due to the guaranteed party’s default; and<br />
(iii) The estimated loss exposure if the party guaranteed were to default.<br />
Fair Value Hierarchy<br />
As at 31 December 2012, there were no financial instruments carried at fair value.