Page 41 - 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 (cont’d)

Derivative financial instruments

The fair value of derivatives (foreign currency forwards) is estimated by discounting the difference
between the contractual forward price and the current forward price for the residual period to
maturity of the contract.

Financial assets at fair value through profit or loss

The fair values of financial instruments traded in active markets are based on quoted market
prices at the end of the reporting period. The Group and University Company also holds unquoted
investments, of which the valuation methodologies are set out in Note 12.

• Notes 2.11 and 16 (b) - measurement of provisions

Provision for undergraduate funding

Provision for undergraduate funding relates to the adjustment to the undergraduate output funding
from MOE in the event the University achieves fewer undergraduates than MOE’s output target. The
provision is based on the University’s actual and projected number of undergraduates.

(d) Adoption of new and revised standards

On 1 April 2015, the Group has adopted all the new and revised FRSs and Interpretations of FRS (“INT
FRS”) that are effective from that date and are relevant to its operations. The adoption of these new/
revised FRSs does not result in changes to the Group’s and University Company’s accounting policies
and has no material effect on the amounts reported for the current or prior years.

NANYANG TECHNOLOGICAL UNIVERSITY AND ITS SUBSIDIARIES 39