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36.
DETERMINATION OF FAIR VALUES
A number of the group’s accounting policies and disclosures require the determination of fair values, for both financial and non-financial
assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods.
Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset
or liability.
Property, plant and equipment
The fair value of property, plant and equipment recognised as a result of a business combination is based on market values. The market
value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a
willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without
compulsion. The market values of other assets are based on the quoted market prices for similar items.
Intangible assets
The fair value of intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the
assets.
Inventory
The fair value of inventory acquired in a business combination is determined based on its estimated selling price in the ordinary course of
business less the estimated costs of completion and sale, and a reasonable profit margin based on the efforts required to complete and sell
the inventory.
Investments
Fair value of listed investments is calculated by reference to stock exchange quoted selling prices at the close of business on the report date.
Fair value of unlisted investments is determined by using appropriate valuation models.
Forward exchange contracts
The fair value of forward exchange contracts is based on their market prices.
Borrowings
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows,
discounted at the market rate of interest at the reporting date. For finance leases the market rate of interest is determined by reference to
similar lease agreements. The carrying value of the bank overdrafts is the fair value.
Share-based payments
The fair value of the share options is measured using a binomial method. Measurement inputs include share price at measurement
date, exercise price of the instrument, expected volatility (based on the historic volatility of The Bidvest Group Limited share), option life,
distribution yield and the risk-free interest rate (based on national government bonds).
37.
SUBSEQUENT EVENTS
No material subsequent events have arisen since June 30 2016.
38.
GOING CONCERN
The directors have made an assessment of the group’s ability to continue as a going concern and there is no reason to believe the group will
not be a going concern in the year ahead.
Bidcorp Limited Annual integrated report 2016 |
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Financial overview