PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 2021 NOTES TO THE FINANCIAL STATEMENTS - 18 - 3.21 Measurement of fair values A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial assets and liabilities and non-financial assets. When measuring the fair value of an asset or a liability, the Group uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows: - Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. - Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. - Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs). If the inputs used to measure the fair value of an asset or liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. 3.22 Use of management’s judgments The preparation of financial statements in conformity with TFRS requires the Group’s management to exercise judgments in order to determine the accounting policies, estimates and various assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the end of the reporting period and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s reasonable consideration of current events, actual results may differ from these estimates. The significant uses of management’s judgements are as follows: 3.22.1 Fair value measurements and valuation processes Some of the Group’s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or liability, the Group uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Group uses other observable information either directly or indirectly or other unobservable information according to level of fair value respectively. Information about valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in Note 36. 3.22.2 Calculation of recoverable amount In the calculation of recoverable amount, the Group’s management estimated the future cash flows discounted to their present value using an appropriate discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. 3.22.3 Impairment of goodwill Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been allocated. The value in use calculation requires the Group’s management to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value where the actual future cash flows are less than expected, an impairment loss may arise. 3.22.4 Recognition of deferred tax assets The recognition of deferred tax assets is based upon whether it is probably that sufficient taxable profits will be available in the future against which the reversal of temporary differences can be deducted which involves judgement regarding the future financial performance of the Group. 250 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
RkJQdWJsaXNoZXIy ODg4NTI=