Financial instruments
as at 29 February 2020
The table below sets out the Group's classification of each class of financial instrument, at their fair values. The carrying amount of these financial instruments approximates their fair values, therefore no fair value disclosures are provided. The different fair value levels are described below.
Level 1 – inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 – inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
Level 3 – inputs are inputs for the asset or liability that are not based on observable market data (unobservable inputs).
In estimating the fair value of an asset or liability, the Group uses market-observable data to the extent it is available. Where level 1 inputs are not available, the Group engages qualified third-party valuers to perform the valuation.
| US$'000 | Level | Audited Year ended February 2020 |
Audited Year ended February 2019 |
|||
|---|---|---|---|---|---|---|
| FINANCIAL ASSETS | ||||||
| Financial assets at amortised cost | ||||||
| Gross trade accounts receivable | 1 140 012 | 1 290 514 | ||||
| Less: Expected credit loss allowances | (29 502) | (31 661) | ||||
| Bonds | 13 118 | 18 960 | ||||
| Loans granted to third parties and other long-term assets due | 9 460 | 4 638 | ||||
| Finance lease receivables | 35 692 | 19 170 | ||||
| Sundry receivables | 56 688 | 63 038 | ||||
| Cash and cash equivalents at financial institutions | 347 189 | 344 400 | ||||
| Financial assets at fair value through profit or loss | ||||||
| Earn-out receivable | 3 | – | 11 694 | |||
| Derivative financial assets | 2 | – | 2 318 | |||
| 1 572 657 | 1 723 071 | |||||
| FINANCIAL LIABILITIES | ||||||
| Financial liabilities at amortised cost | ||||||
| Trade payables | (928 201) | (1 056 451) | ||||
| Other payables and other financial liabilities | (198 236) | (174 234) | ||||
| Long-term interest bearing liabilities* | (43 032) | (45 406) | ||||
| Lease liabilities* | (129 473) | (30 982) | ||||
| Short-term interest-bearing liabilities | (50 751) | (64 746) | ||||
| Bank overdrafts | (263 800) | (304 019) | ||||
| Financial liabilities at fair value through profit or loss | ||||||
| Amounts owing to vendors | 3 | (5 490) | (2 329) | |||
| Derivative financial liabilities | 2 | (724) | (2 407) | |||
| (1 619 707) | (1 680 574) |
| * | Includes current portion of long-term liabilities. |
There were no transfers between Level 1 and Level 2 during the year.
Amounts owing to vendors represent purchase considerations owing in respect of acquisitions. The purchase considerations are to be settled with the vendors in cash or shares on achievement of agreed performance criteria. The amounts owing are interest free. Amounts owing to vendors are classified as financial liabilities designated at fair value through profit or loss. They are classified as Level 3 financial instruments, whose fair value measurements are derived from inputs that are unobservable for the liabilities. Movements are presented in the statement of comprehensive income as acquisition-related fair value adjustments.