Page 339 - Bank Muamalat_AR24

ANNUAL REPORT 2024 1 2 3 4 5 6 7 Our Numbers 8 337

48. FAIR VALUE MEASUREMENTS

(a) Financial instruments measured at fair value
Determination of fair value and the fair value hierarchy

Level 1 - Quoted (unadjusted) market prices in active markets for identical instruments;
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
either directly (i.e. prices) or indirectly (i.e. derived from prices), observable; and

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.

Where such quoted and observable market prices are not available, fair values are determined using appropriate
valuation techniques, which include the use of mathematical models, such as discounted cash flow models and option
pricing models, comparison to similar instruments for which market observable prices exist and other valuation
techniques. The objective of valuation techniques is to arrive at a fair value determination that reflects the price of
the financial and non-financial instruments at the reporting date, that would have been determined by market
participants acting at arm’s length. Valuation techniques used incorporate assumptions regarding discount rates, profit
rate yield curves, estimates of future cash flows and other factors. Changes in these assumptions could materially
affect the fair values derived. The Group and the Bank generally uses widely recognised valuation techniques with
market observable inputs for the determination of fair value, which require minimal Management’s judgement and
estimation, due to the low complexity of the financial instruments held.

The following table shows the financial instruments which are measured at fair value at the reporting date analysed
by the various level within the fair value hierarchy:
Valuation technique using;
Quoted Observable Unobservable
Market Price Inputs Inputs
Level 1 Level 2 Level 3 Total
Group RM’000 RM’000 RM’000 RM’000

2024
Financial assets
Financial investments at FVTPL - 7,188 7,700 14,888
Financial investments at FVOCI 136,877 7,353,277 79,817 7,569,971
Islamic derivative financial assets - 14,496 - 14,496
Total financial assets measured at fair value 136,877 7,374,961 87,517 7,599,355

Financial liabilities
Islamic derivative financial liabilities - 17,309 - 17,309

Total financial liabilities measured at fair value - 17,309 - 17,309