Page 40 - Nanyang Technological University

NOTES TO FINANCIAL STATEMENTS
(cont’d)
31 March 2016

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 2.9, 10 and 12 - 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.

38 NTU ANNUAL REPORT 2016