31 DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, 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. When applicable, further information about the assumptions made in determining fair values is disclosed
in the notes specific to that asset or liability:
(i)
Trade and other receivables
The fair value of non-current trade and other receivables is estimated at the present value of future cash flows,
discounted at the market rate of interest at the reporting date. This fair value is determined for disclosure purposes.
(ii)
Non-derivative financial liabilities
The fair value of non-derivative financial liabilities, which is determined for measurement upon acquisition and 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.
(iii)
Contingent consideration
The fair value of contingent consideration is calculated based on the present value of future expected payment amounts.
The contingent consideration is discounted to present value using the post-tax cost of debt of the Company.
(iv)
Share based payments
The fair value measurement for share based payments is described in Note 23.
32 FINANCIAL RISK MANAGEMENT
Overview
The Group’s activities expose it to credit risk, liquidity risk and market risk (including interest rate risk and currency risk). The
Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of
managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate
balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to reflect changes
in market conditions and the Group’s activities.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers.
Cash and fixed deposits are placed with banks and financial institutions which are regulated.
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TELECHOICE INTERNATIONAL LIMITED
2015 ANNUAL REPORT
NOTES TO THE
FINANCIAL STATEMENTS
