121 Annual Report 2024 2 BASIS OF PREPARATION (continued) 2.4 Use of estimates and judgements (continued) Measurement of fair values (continued) When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2: Inputs other than quoted prices included in 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). If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement (with Level 3 being the lowest). The Group recognises transfers between levels of the fair value hierarchy as of the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes: • Note 5 – Valuation of investment properties • Note 30 – Valuation of financial instruments 2.5 Changes in material accounting policies New accounting standards and amendments The Group has applied the recognition and measurement principles of the following FRSs, amendments to and interpretations of FRS for the first time for the annual period beginning on 1 January 2024: • Amendments to FRS 1: Classification of Liabilities as Current or Non-current • Amendments to FRS 1: Non-current Liabilities with Covenants The application of the recognition and measurement principles of these amendments to accounting standards and interpretations did not have a material effect on the financial statements. 3 MATERIAL ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these financial statements, and have been applied consistently by the Group, except as explained in Note 2.5, which addresses changes in material accounting policies. 3.1 Basis of consolidation Business combinations The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs.
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