UOB Annual Report 2002 - United Overseas Bank

Notes to the Financial Statements
for the financial year ended 31 December 2002
45 Fair Values of Financial Instruments
Financial instruments comprise financial assets, financial liabilities and also derivative financial instruments. The fair value of a
financial instrument is the amount at which the instrument could be exchanged or settled between knowledgeable and willing
parties in an arm’s length transaction, other than in a forced or liquidation sale. The information presented herein represents
best estimates of fair values of financial instruments at the balance sheet date.
The on-balance sheet financial assets and financial liabilities of the Group and the Bank whose fair values are required to be
disclosed in accordance with Singapore Statement of Accounting Standard 32 (“SAS 32”) comprise all its assets and liabilities
with the exception of deferred tax assets, investments in subsidiaries, investments in associates, fixed assets, goodwill, provision
for current tax and deferred tax liabilities. The estimated fair values of those on-balance sheet financial assets and financial
liabilities as at the balance sheet date approximate their carrying amounts as shown in the balance sheets, except for the
following financial assets and liabilities:
The Group
The Bank
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
$’000 $’000 $’000 $’000
2002
Singapore Government treasury bills and securities 8,260,989 8,324,001 8,002,833 8,062,101
Other government treasury bills and securities 1,332,948 1,346,718 419,031 431,117
Dealing securities 620,109 623,411 431,811 435,045
Investment securities 3,945,383 3,929,455 2,687,019 2,690,153
Debts issued 2,146,810 2,272,921 1,294,399 1,420,510
2001
Singapore Government treasury bills and securities 8,711,833 8,692,326 4,272,411 4,252,904
Other government treasury bills and securities 1,817,360 1,823,652 244,261 246,078
Dealing securities 680,989 683,801 358,104 358,104
Investment securities 3,431,062 3,680,783 989,656 987,119
Debts issued 4,157,153 4,153,412 3,639,095 3,635,354
The fair values of derivative financial instruments are shown in Note 39.
The fair values of financial instrument contingent liabilities and undrawn credit facilities are not readily ascertainable. These
financial instruments are presently not sold or traded. They generate fees that are in line with market prices for similar arrangements.
The estimated fair value may be represented by the present value of the fees expected to be received, less associated costs of
obligations or services to be rendered. The Group and the Bank assess that their respective fair values are unlikely to be significant.
Where available, quoted and observable market prices are used as the measure of fair values, such as for government treasury
bills and securities, quoted securities, debts issued and most of the derivative financial instruments.
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