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Fair value hierarchy (reviewed)The Group has the following hierarchy for measuring the fair value of assets and liabilities at the reporting date: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2: Inputs other than quoted prices in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. There were no transfers during the year ended 31 December 2020 and 2019. The following table sets out the Group's financial assets and financial liabilities by level within the fair value hierarchy at the reporting date:
Environmental trust fundsThe environmental trust funds are measured at fair value through profit or loss and amortised cost which approximates fair value based on the nature of the fund's underlying investments. Trade receivables from provisional copper salesValued using quoted market prices based on the forward London Metal Exchange ("LME") and, as such, classified within Level 2 of the fair value hierarchy. Listed investmentsComprise equity investments in listed entities and therefore valued using quoted market prices in active markets. Asanko redeemable preference sharesThe fair value is based on the expected cash flows of the Asanko Gold Mine based on the life-of-mine model. The key inputs used in the valuation of the fair value were market related interest rates and expected redemption period. WarrantsWarrants are measured at fair value through profit or loss. The fair value is determined using a standard European call option format based on a standard option theory model. Oil, gold, copper and foreign exchange derivative contractsThe fair values of these contracts are determined by using the applicable valuation models for each instrument type with the key inputs being forward prices, interest rates and volatility. BorrowingsThe 5-year notes and the 10-year notes (2019: 2020 notes, the 5-year notes and the 10-year notes) are issued at a fixed interest rate. The fair values of these notes are based on listed market prices and are classified within Level 1 of the fair value hierarchy. The fair value of the remaining borrowings approximates their carrying amount, determined using the discounted cash flow method using market related interest rates and are classified within Level 3 of the fair value hierarchy. |
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