FGV Audited Financial Statements 2019

81 01 S E C T I O N NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019 AUDITED FINANCIAL STATEMENTS 2019 4 FINANCIAL RISK MANAGEMENT (CONTINUED) (c) Fair value estimation (continued) (iii) Financial instruments in Level 3 The following table present the changes in recurring Level 3 financial instruments during the financial year: Group 2019 RM’000 2018 RM’000 LLA liability At 1 January 4,328,008 4,393,280 Fair value changes charged to profit or loss 236,821 233,379 Repayment during the financial year (248,683) (298,651) At 31 December 4,316,146 4,328,008 Financial assets at fair value through other comprehensive income At 1 January 82,634 86,873 Additions 8,034 13,593 Fair value changes 13,018 (17,832) At 31 December 103,686 82,634 (d) Offsetting financial assets and financial liabilities There are no offsetting of financial assets and financial liabilities during the financial year for the Group and Company. 5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS Estimates and judgments are continually evaluated by Directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (i) LLA liability The fair value of the LLA liability is measured using a discounted cash flow projections based on financial budgets approved by the Directors covering a 92 year period. As a result of the fair value assessment, the Group has recognised a LLA liability of RM4,316,146,000 (2018: RM4,328,008,000). The key assumptions and the sensitivity analysis are as disclosed in Note 48 to the financial statements.