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99 ANNUAL REPORT 2010
for the year ended 30 June 2010
Notes to the Financial Statements continued
(D) FAIR VALUE
The fair value of cash, cash equivalents and non-interest-bearing  nancial assets and liabilities approximates their carrying value due to their short
maturity. The fair value of  nancial assets and liabilities is determined by valuing them at the present value of future contracted cash  ows.
Cash  ows are discounted using standard valuation techniques at the applicable market yield, having regard to the timing of the cash  ows.
The fair value of forward foreign exchange and fuel contracts is determined as the unrealised gain/loss at balance date by reference to market
exchange rates and fuel prices. The fair value of interest rate swaps is determined as the present value of future contracted cash  ows. Cash  ows
are discounted using standard valuation techniques at the applicable market yield, having regard to the timing of the cash  ows. The fair value of
options is determined using standard valuation techniques.
Other  nancial assets and liabilities represent the fair value of derivative  nancial instruments recognised on the Consolidated Balance Sheet in
accordance with AASB 139.
Carrying Amount Fair Value
Qantas Group Notes
2010
$M
2009
$M
2010
$M
2009
$M
Financial assets
Cash and cash equivalents 10 3,704 3,617 3,725 3,625
Trade debtors 11 817 824 817 824
Aircraft security deposits 11 13 42 13 42
Sundry debtors 11 537 582 537 582
Other loans 11 128 128 128 128
Other  nancial assets 25 335 905 335 905
Other investments 3333
5,537 6,101 5,558 6,109
Financial liabilities
Trade creditors 19 600 597 600 597
Other creditors and accruals 19 1,150 1,236 1,150 1,236
Bank loans – secured 21 3,219 2,934 3,369 3,029
Bank loans – unsecured 21 740 629 793 641
Other loans – unsecured 21 1,277 1,307 1,317 1,358
Other  nancial liabilities 25 473 909 473 909
Lease and hire purchase liabilities 21 482 633 479 637
7,941 8,245 8,181 8,407
Net  nancial liabilities 2,404 2,144 2,623 2,298
(E) FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE
The different methods of estimating the fair value of  nancial instruments have been de ned as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The fair value of  nancial instruments, by valuation method, are summarised in the table below:
Qantas Group
2010
$M Level 1 Level 2 Level 3 Total
Derivative  nancial assets – 335 – 335
Derivative  nancial liabilities – (473) – (473)
Net  nancial instruments measured at fair value – (138) – (138)
2009
$M
Derivative  nancial assets – 825 – 825
Derivative  nancial liabilities – (909) – (909)
Net  nancial instruments measured at fair value – (84) – (84)
Financial instruments that use valuation techniques with only market observable inputs to the overall valuation include interest rate swaps, forward
and option commodity contracts and foreign exchange contracts that are not traded on a recognised exchange.
34. Financial Risk Management continued