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NOTES TO THE
FINANCIAL STATEMENTS

for the financial year ended 31 december 2020 (continUed)

51 FAIR VALUE OF FINANCIAL INSTRUMENTS
financial instruments comprise financial assets, financial liabilities and off-balance sheet instruments. fair value is the amount
at which the financial assets could be exchanged or a financial liability settled, between knowledgeable and willing parties in
an arm’s length transaction. the information presented herein represents the estimates of fair values as at the financial position
date.

Quoted and observable market prices, where available, are used as the measure of fair values of the financial instruments.
inteGrated annUal rePort 2020 other factors. changes in the assumptions could materially affect these estimates and the corresponding fair values.
Where such quoted and observable market prices are not available, fair values are estimated based on a range of methodologies
and assumptions regarding risk characteristics of various financial instruments, discount rates, estimates of future cash flows and

fair value information for non-financial assets and liabilities are excluded as they do not fall within the scope of mfrS 7,
“Financial Instruments: Disclosure and Presentation” which requires the fair value information to be disclosed.
the fair values are based on the following methodologies and assumptions:
Cash and short-term funds and deposits and placements with financial institutions

for cash and short-term funds and deposits and placements with financial institutions with maturities of less than six months,
326 the carrying value is a reasonable estimate of fair values. for deposits and placements with maturities six months and above,
the estimated fair values are based on discounted cash flows using prevailing islamic money market profit rates at which similar
deposits and placements would be made with financial instruments of similar credit risk and remaining year to maturity.
bimb holdinGS berhad 199701008362 (423858-X) securities, fair values have been estimated by reference to market indicative yields or net tangible asset backing of the investee.
Financial assets measured at FVTpL, FVOCI
the estimated fair values are generally based on quoted and observable market prices. Where there is no ready market in certain

non-market observable inputs also include valuation technique based on assumptions that are neither supported by prices from
observable current market transactions in the same instrument nor are they based on available market data. the main asset class
in this category are unquoted equity securities.
Financing, advances and others

the fair values are estimated by discounting the estimated future cash flows using the prevailing market rates of financing
with similar credit risks and maturities. the fair values are represented by their carrying value, net of impairment loss, being the
recoverable amount.

Deposits from customers and investment accounts of customers
the fair values of deposits are deemed to approximate their carrying amounts as rate of returns are determined at the end of
their holding periods based on the profit generated from the assets invested.