Page 273 - BAM ONE REPORT 2565 (ENGLISH VERSION)

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Form 56-1 One Report 2022
5.3 Fair value of financial instruments

In determining the fair value of financial instruments that are not actively traded and for which
quoted market prices are not readily available, the management exercises judgement, using
a variety of valuation techniques and models. The input to these models is taken from

observable markets, and includes credit risk consideration of counterparty, liquidity,
correlation and longer-term volatility of financial instruments. Change in assumptions about
these factors could affect the fair value and disclosures of fair value hierarchy.

5.4 Credit-adjusted effective interest rate

The management is required to use judgement in estimating the credit-adjusted effective
interest rate. The Company recognised interest income from loans purchased of receivables
using credit-adjusted effective interest rate, which is calculated based on the basis of the

estimated future cash inflows over the expected life of loans purchased of receivables that
have similar characteristics and can be estimated reliably. The estimates involve a large

number of variables, therefore, actual results could differ from those estimates.

5.5 Allowance for impairment of properties for sale

The Company determines allowance for impairment of properties for sale when the
recoverable amount of properties for sale is lower than the carrying amount. The management
exercises judgement to estimate the loss on impairment, taking into account the latest

appraisal value, the type and the nature of the assets.

5.6 Deferred tax assets

Deferred tax assets are recognised for deductible temporary differences to the extent that it

is probable that taxable profit will be available against which the temporary differences can
be utilised. This is because the taxable profit involves significant historical data with a large
number of databases and relevant supporting documents. Significant management

judgement is required to determine the amount of deferred tax assets that can be recognised,
based upon the certainty of events that future taxable profit can be utilised and the likely timing
and level of estimate future taxable profit.

5.7 Post-employment benefits under defined benefit plans

The obligation under the defined benefit plan is determined based on actuarial techniques.
Such determination is made based on various assumptions, including discount rate, future
salary increase rate, mortality rate and staff turnover rate.

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