Annual Report 2017-2018

THE AMERICAN CLUB

NOTES TO FINANCIAL STATEMENTS 30 June 2018

4. FINANCIAL INSTRUMENTS, FINANCIAL RISKS AND CAPITAL MANAGEMENT (cont’d)

Determination of fair value

Alternative investments: These investments are valued using valuation models which use both observable and non-observable data. The non-observable inputs to the models include assumptions regarding the future financial performance of the investee, its risk profile, and economic assumptions regarding the industry and geographical jurisdiction in which the investee operates.

Movements in Level 3 financial instruments measured at fair value

The following table presents the reconciliation for all financial assets measured at fair value based on significant unobservable inputs (Level 3).

2018

2017

$

$

Opening balance

13,634 2,625,079

Redemptions during the year Total gains (losses) - in other comprehensive income

-

(2,265,009)

(1,407)

(3,288,091)

- in profit or loss Closing balance

- 2,941,655

12,227

13,634

(c) Capital risk management policies and objectives

The Club strives to maintain positive accumulated funds to ensure that the Club will be able to continue as a going concern. Members of the Club have passed a resolution at the Extraordinary General Meeting on 3 June 2015 for the Club to maintain not less than $20 million in reserves (cash & cash equivalent and investment securities) throughout the final completion of the Club’s redevelopment project. The Club’s overall strategy remains unchanged from prior year. The Club is not subject to any externally imposed regulatory reserve requirement. As at the end of the reporting period, the Club maintains a reserve of $54,826,263 (2017 : $85,626,138). This reserve will be drawn down to pay for amounts committed but unpaid under contracts related to the redevelopment project.

49 2017/18 ANNUAL REPORT