KENANGA ANNUAL REPORT 2017

51. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D.) Fair value measurement (cont’d.) Bank 2016 Level 1 RM’000 Level 2 RM’000 Level 3 RM’000 Total RM’000 Financial assets measured at fair value Financial assets at fair value through profit or loss – Debt securities – 169,311 – 169,311 – Equity securities 211,210 – – 211,210 – Unquoted private debt securities – – 1,067 1,067 Financial investments available-for-sale # – Debt securities – 737,324 – 737,324 – Negotiable Instruments of Deposits – 50,000 – 50,000 – Islamic Negotiable Instruments of Deposits – 149,890 – 149,890 Derivative financial assets – 39,117 – 39,117 Financial assets for which fair values are disclosed Financial investments held-to-maturity – 40,026 – 40,026 Loans, advances and financing – – 2,065,272 2,065,272 211,210 1,185,668 2,066,339 3,463,217 Financial liability measured at fair value Derivative financial liabilities 13,613 33,793 – 47,406 Financial liabilities for which fair values are disclosed Obligations on securities sold under repurchase agreements – 27,253 – 27,253 Borrowings – 118,334 – 118,334 13,613 179,380 – 192,993 # Excludes unquoted securities stated at cost of RM490,000 (2016: RM490,000). There have been no transfers between Level 1 and Level 2 during the financial year. The methods and assumptions used to estimate the fair value of the financial instruments not measured at fair value are as disclosed in Note 48. Movements in Level 3 financial instruments measured at fair value The level of the fair value hierarchy of financial instruments is determined at the beginning of each reporting period. The following table shows a reconciliation of the opening and closing amounts of Level 3 financial assets which are recorded at fair value: Group and Bank 2017 RM’000 2016 RM’000 Balance at the beginning of the financial year 1,067 – Acquisition of investments during the financial year 10,208 1,067 Disposal of investments during the financial year (1,067) – Balance at the end of the financial year 10,208 1,067 Annual Report 2017 31 December 2017 211 notes to the financial statements