Page 38 - Nanyang Technological University

NOTES TO
FINANCIAL STATEMENTS (CONT’D)

31 March 2015

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.1 Basis of preparation (cont’d)

(c) Use of estimates and judgements

The preparation of financial statements in conformity with FRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets, liabilities, income and expenditure. Actual results may differ from
these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimates are revised and in any future periods
affected.

Management is of the opinion that any instances of application of judgements are not expected to
have a significant effect on the amounts recognised in the financial statements.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at
the end of the reporting period, that have a significant risk of causing a material adjustment to the
carrying amount of assets and liabilities within the next financial year, are discussed below.

• Notes 2.8, 9 and 11 - valuation of financial instruments

Fair value measurements and valuation processes

In estimating the fair value of an asset or a liability, the group obtains valuations from third
party fund managers/fund administrators/custodian banks. The valuations are determined
using market-observable data to the extent it is available. Where Level 1 inputs are not
available, the fund managers/fund administrators/custodian banks establish the fair value
of the investments using the net asset value at the end of the reporting period.

36 NTU ANNUAL REPORT 2015