Page 124 - RFHL ANNUAL REPORT 2024_ONLINE

122 Notes to the Consolidated Financial Statements
For the Year Ended September 30, 2024.
Expressed in millions of Trinidad and Tobago dollars, except where otherwise stated.

2. Material accounting policies (continued)
2.6 Summary of material accounting policies (continued)
w Revenue recognition (continued)

Dividends
Dividend income is recognised when the right to receive the payment is established.

x Fair value
The Group measures financial instruments at fair value at each Consolidated statement of financial position date. Fair
value related disclosures for financial instruments and non-financial assets that are measured at fair value, where fair
values are disclosed, are shown in Note 25 to the Consolidated financial statements.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
i In the principal market for the asset or liability, or
ii In the absence of a principal market, in the most advantageous market for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.

All assets and liabilities for which fair value is measured or disclosed in the Consolidated financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to
the fair value measurement as a whole:

Level 1
Included in the Level 1 category are financial assets and liabilities that are measured in whole or in part by reference
to published quotes in an active market. A financial instrument is regarded as quoted in an active market if quoted
prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory
agency and those prices represent actual and regularly occurring market transactions on an arm’s length basis.

Level 2
Included in the Level 2 category are financial assets and liabilities that are measured using a valuation technique
based on assumptions that are supported by prices from observable current market transactions and for which
pricing is obtained via pricing services, but where prices have not been determined in an active market. This includes
financial assets with fair values based on broker quotes, investments in private equity funds with fair values obtained
via fund managers and assets that are valued using the Group’s own models whereby the majority of assumptions
are market observable.

Level 3
Included in the Level 3 category are financial assets and liabilities that are not quoted as there are no active markets
to determine a price. These financial instruments are held at cost, being the fair value of the consideration paid for
the acquisition of the investment, and are regularly assessed for impairment.