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Notes to the Group Financial Statements continued
23. Fair value measurement
Fair values
The following table compares carrying amounts and fair values of the Group’s financial assets and liabilities:
2015 2014
Note
Carrying
value
$m
Fair
value
$m
Carrying
value
$m
Fair
value
$m
Financial assets
Cash and cash equivalents 17 1,137 1,137 162 162
Equity securities available-for-salea 15 150 150 144 144
Loans and receivables:
Other financial assets 15 134 134 113 113
Trade and other financial receivables, excluding prepayments 16 391 391 388 388
Derivativesa–– 22
1,812 1,812 809 809
Financial liabilities
£250m 6% bonds 2016 21 (371) (386) (390) (423)
£400m 3.875% bonds 2022 21 (588) (608) (618) (659)
£300m 3.75% bonds 2025 21 (444) (443) ––
Finance lease obligations 21 (224) (305) (218) (277)
Unsecured bank loans 21 ––(359) (359)
Secured bank loan 21 –– (3) (3)
Bank overdrafts 21 (39) (39) (107) (107)
Trade and other payables 18 (1,417) (1,417) (1,396) (1,396)
Derivativesa(3) (3) ––
Provisions 19 (15) (15) (10) (10)
(3,101) (3,216) (3,101) (3,234)
a 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 and bank overdrafts 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 the secured
and unsecured bank loans 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.
2015 2014
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 14 – – 14 16 – – 16
Unquoted equity shares ––136136 ––128128
Derivatives –––– –2–2
Liabilities
£250m 6% bonds 2016 (386) – – (386) (423) – – (423)
£400m 3.875% bonds 2022 (608) – – (608) (659) – – (659)
£300m 3.75% bonds 2025 (443) – – (443) ––––
Finance lease obligations –(305) –(305) – (277) – (277)
Derivatives –(3)–(3) ––––
128 IHG Annual Report and Form 20-F 2015