Investor Presentaiton
HKAS 1.51(a)
HKAS 1.49
HKFRS 13.93(d)
HKFRS 13.93(h)
HK Listco Ltd
Financial statements for the year ended 31 December 2023
Valuation techniques and inputs used in Level 2 fair value measurements170
The fair value of forward exchange contracts in Level 2 is determined by discounting the difference between
the contractual forward price and the current forward price. The discount rate used is derived from the
relevant government yield curve as at the end of the reporting period plus an adequate constant credit spread.
The fair value of interest rate swaps is the estimated amount that the group would receive or pay to transfer
the swap at the end of the reporting period, taking into account current interest rates and the current
creditworthiness of the swap counterparties.
Information about Level 3 fair value measurements 170
Significant unobservable
Valuation techniques
inputs
Range 171
Weighted
average171
Unlisted equity instruments
Market comparable
companies
Discount for lack of
marketability
1% to |
1%
]%
(2022: |
1% to
1%)
(2022: | ]%)
Conversion option embedded in
convertible notes
1%
1%
Binomial lattice model
Expected volatility
(2022: 1%)
(2022: []%)
The fair value of unlisted equity instruments is determined using the price/earning ratios of comparable listed
companies adjusted for lack of marketability discount. The fair value measurement is negatively correlated to
the discount for lack of marketability. As at 31 December 2023, it is estimated that with all other variables
held constant, a decrease/increase in discount for lack of marketability by [●] % would have
increased/decreased the group's other comprehensive income by $[●] (2022: $[●]).
The fair value of conversion option embedded in the convertible notes is determined using the binomial lattice
model and the significant unobservable input used in the fair value measurement is expected volatility. The
fair value measurement is positively correlated to the expected volatility. As at 31 December 2023, it is
estimated that with all other variables held constant, an increase/decrease in the expected volatility by [●]%
would have decreased/increased the group's profit by $[●] (2022: $[●]).284
HKFRS 13.93(e)&(f)
The movements during the period in the balance of these Level 3 fair value measurements are as follows: 173
2023
2022
$'000
$'000
Unlisted equity securities:
At 1 January
Payment for purchases
Net unrealised gains or losses recognised in other comprehensive income
during the period
At 31 December
Conversion option embedded in convertible notes:
At 1 January
Changes in fair value recognised in profit or loss during the period
At 31 December
4,950
4,800
100
90
50
5,040
4,950
171
169
1
2
172
171
Total gains or losses for the period included in profit or loss for assets held at
the end of the reporting period
1
2
HKFRS 13.93(h)
284 As mentioned in footnote 172, for recurring fair value measurements categorised within Level 3 of the fair value hierarchy,
entities should give a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs
if a change in those inputs to a different amount might result in a significantly higher or lower fair value measurement. For
financial instruments measured at fair value on a recurring basis and categorised within Level 3, a quantitative sensitivity
analysis is required in addition to the narrative description.
187
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