194 CapitaLand Integrated Commercial Trust Notes to the financial statements Year ended 31 December 2024 30 CLASSIFICATION AND FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Determination of fair values The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the Group and Trust. Financial derivatives The fair values of cross currency swaps and interest rate swaps (Level 2 fair values) are based on banks’ quotes. These quotes are assessed for reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market rates for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take into account the credit risk of the Group and counterparties when appropriate. The fair values of forward exchange contracts are determined using quoted forward exchange rates at the reporting date and present value calculations based on high credit quality yield curve in the respective currencies. Loans and borrowings The fair value of quoted loans and borrowings is their quoted ask price at the reporting date. Fair value for unquoted loans and borrowings is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the measurement date. Fair value is determined for disclosure purposes. Other financial assets and liabilities At 31 December 2024 and 31 December 2023, fair value of loans to subsidiaries and joint ventures and non-trade amounts due to a subsidiary are estimated based on the present value of future principal and interest cash flows (if relevant), discounted at the market rate of interest at the measurement date. The carrying amounts of trade and other receivables, cash and cash equivalents, trade and other payables and security deposits (2023: trade and other receivables, cash and cash equivalents, trade and other payables and security deposits) are an approximation of their fair values because they are either short term in nature or effect of discounting is immaterial. Interest rates used in determining fair values The interest rates used to discount estimated cash flows, where applicable, are based on forward rates as at 31 December plus a credit spread, and are as follows: 2024 2023 % % Group Loans to joint ventures 3.41 4.30 Loans and borrowings 3.44 – 3.63 3.53 – 4.49 Trust Loans to subsidiaries 3.41 4.30 Loans to joint ventures 3.41 4.30 Amount due to a subsidiary (non-trade) 3.41 – 3.47 3.93 – 3.98 Loans and borrowings 3.28 – 3.76 3.94 – 4.25
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