ECCB 2014-2015 Annual Report and Statement of Accounts

EASTERN CARIBBEAN CENTRAL BANK

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 Financial risk management …continued f) Fair value …continued Fair Value Hierarchy

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (expressed in Eastern Caribbean dollars) March 31, 2015

3.

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 typ es 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 liabil ities 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 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:

Level 1

Level 3

$

$

Financial liabilities Financial liabilities held for trading

1,566,227

-

92

ECCB ANNUAL REPORT 2014/2015

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