Holiday Inn 2013 Annual Report Download - page 142

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24. Fair value measurement
Fair values
The following table compares carrying amounts and fair values of the Group’s financial assets and liabilities:
2013 2012
Note
Carrying
value
$m
Fair value
$m
Carrying
value
$m
Fair value
$m
Financial assets
Cash and cash equivalents 18 134 134 195 195
Equity securities available-for-sale1 15 136 136 112 112
Loans and receivables:
Other financial assets 15 112 112 49 49
Trade and other financial receivables, excluding prepayments 17 358 358 362 362
Derivatives123 1 1 2 2
741 741 720 720
Financial liabilities
£250m 6% bonds 2016 22 (412) (461) (403) (456)
£400m 3.875% bonds 2022 22 (654) (650) (638) (652)
Finance lease obligations 22 (215) (233) (212) (268)
Other borrowings 22 (4) (4) (5) (5)
Trade and other payables 19 (1,322) (1,322) (1,272) (1,272)
Derivatives123 (11) (11) (19) (19)
Provisions 20 (3) (3) (2) (2)
(2,621) (2,684) (2,551) (2,674)
1 Financial assets and liabilities which are measured at fair value.
There are no other assets or liabilities measured at fair value on a recurring or non-recurring basis, or for which fair value is disclosed.
The fair value of cash and cash equivalents approximates book value due to the short maturity of the investments and deposits,
and the fair value of other financial assets approximates book value based on prevailing market rates. The fair value of other
borrowings approximates book value as interest rates reset to market rates on a frequent basis. The fair value of trade and other
receivables, trade and other payables and current provisions approximates to their carrying value, including the future redemption
liability of the Group’s loyalty programme.
Fair value hierarchy
The following table provides the fair value measurement hierarchy of the above assets and liabilities, other than those with carrying
amounts which are reasonable approximations of their fair values:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on fair value are observable, either directly orindirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable marketdata.
2013 2012
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
Level 1
$m
Level 2
$m
Level 3
$m
Total
$m
Assets
Equity securities available-for-sale:
Quoted equity shares 9 – – 9 18 – – 18
Unquoted equity shares – – 127 127 – – 94 94
Derivatives –1–1 –2–2
Liabilities
£250m 6% bonds 2016 (461) – – (461) (456) – – (456)
£400m 3.875% bonds 2022 (650) – – (650) (652) – – (652)
Finance lease obligations –(233) –(233) –(268) –(268)
Derivatives –(11) –(11) –(19) –(19)
There were no transfers between Level 1 and Level 2 fair value measurements during the year and no transfers into and out of Level 3.
140 IHG Annual Report and Form 20-F 2013
Notes to the Group Financial Statements continued