ECCB 2014-2015 Annual Report and Statement of Accounts - page 106

Eastern Caribbean Central Bank
Notes to Consolidated Financial Statements
March 31, 2015
(expressed in Eastern Caribbean dollars)
3. Financial risk management…continued
f) Fair value…continued
Fair Value Hierarchy
IFRS 7 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation
techniques are observable or unobservable. Observable inputs reflect market data obtained from
independent sources; unobservable inputs reflect the Bank’s market assumptions. These two types
of inputs have created the following fair value hierarchy:
- Level 1: Quoted prices in active markets for identical assets and liabilities.
- Level 2: Inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
- Level 3: Inputs for the assets or liabilities that are not based on observable market data. This
level includes equity investments and debt instruments with significant unobservable
components.
The hierarchy requires the use of observable market data when available. The Bank considers
relevant and observable market prices in valuations where possible.
The following table presents the Bank’s financial assets and liabilities that are measured at fair
value at March 31, 2015:
Level 1 Level 3
$ $
Financial assets
Commercial paper 251,793,179 –
Financial assets held for trading 4,495,651 –
Available-for-sale – foreign investment securities 2,539,942,707 –
Available-for-sale – domestic investment securities – 421,686
2,796,231,537 421,686
Level 1 Level 3
$ $
Financial liabilities
Financial liabilities held for trading 1,566,227 -
EASTERN CARIBBEAN CENTRAL BANK
ECCB ANNUAL REPORT 2014/2015 92
3. Financial risk management…continued
f) Fair value…continued
Fair Value Hierarchy
IFRS 7 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques
are observable or unobservable. Observable inputs reflect market data obtained from independent sources;
unobs rvable inp ts reflect the Bank’s market assumptions. These two types of inputs have created the f llowing
fair value ierar hy:
- - Level 1: Quoted prices in active markets for identical assets and liabilities.
- - evel 2: Inputs other than quoted prices included within Level 1 that are observable for th asset or
liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
- - Level 3: Inputs for the assets or liabilities that are not based on observable market data. This level includes
equity investments and debt instru ents with significant unobservable components.
hierarchy requires the use of observable market data when available. The Bank considers relevant and
obs rvable market prices in v lua ions where possible.
following table presents the Bank’s financial ssets and liabilities th t are measured at fair valu at March
31, 2015:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(expressed in Eastern Caribbean dollars) March 31, 2015