Page 144 - RFHL ANNUAL REPORT 2025 ONLINE_NEW

142 • Republic Financial Holdings Limited 2025 Annual Report • FINANCIALS

Notes to the Consolidated Financial Statements

For the year ended September 30, 2025. 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)

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.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.

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.