ANNUAL INTEGRATED REPORT 2021
ANNUAL INTEGRATED REPORT 2021 | AXTEL
=
Fair value hierarchy
The following is an analysis of financial instruments measured in
accordance with the fair value hierarchy. Three different levels are
used as presented below:
•
•
•
Level 1: Quoted prices for identical instruments in active markets.
Level 2: Other valuations including quoted prices for similar
instruments in active markets, which are directly or indirectly
observable.
Level 3: Valuations made through techniques where one or more of
their significant data inputs are unobservable.
The following table presents the Company's assets and liabilities that
are measured at fair value as of December 31, 2021, 2020 and 2019:
Level 1
As of December 31, 2021
Level 2
Level 3
Total
Financial assets
(liabilities):
Interest rate swap
$
$ (33,575)
$
$ (33,575)
$
$ (33,575) $
$ (33,575)
Level 1
As of December 31, 2020
Level 2
Level 3
Total
Financial assets
(liabilities):
Interest rate swap
$
$ (207,197)
$
$ (207,197)
$
$ (207,197) $
$ (207,197)
Level 1
As of December 31, 2019
Level 2
Level 3
Total
Zero strike calls
$ 92,673
$
$
$
Forwards
Interest rate swap
(6,535)
(137,177)
$ 92,673
$ (143,712)
$
$ (51,039)
Financial assets (liabilities):
92,673
(6,535)
(137,177)
05
•
The specific valuation techniques used to value financial instruments
include:
Market quotations or quotations for similar instruments.
The fair value of forward exchange agreements is determined using
exchange rates at the closing balance date, with the resulting value
discounted at present value.
Other techniques such as the analysis of discounted cash flows, which
are used to determine fair value of the remaining financial instruments.
•
CRITICAL ACCOUNTING ESTIMATES AND SIGNIFICANT JUDGMENTS
Estimates and judgments are continually evaluated and are based on
historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.
The Company makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
addressed below:
a. Impairment and useful lives of long-lived assets
The Company reviews depreciable and amortizable assets on an
annual basis for signs of impairment, or when certain events or
circumstances indicate that the book value may not be recovered
during the remaining useful life of the assets. For intangible assets
with an indefinite useful life, the Company performs impairment
45
145View entire presentation