CITIC Limited Half-Year Report 2020

118 CITIC Limited Half-Year Report 2020 For the six months ended 30 June 2020 Notes to the Consolidated Financial Statements 29 Financial risk management and fair values (continued) (e) Fair values (continued) (iii) Estimation of fair values As at the balance sheet date, the Group adopted the following major methods and assumptions in estimating the fair value of financial instruments. Investments in financial assets and financial liabilities Fair value is based on quoted market prices as at the balance sheet date for trading financial assets and liabilities (excluding derivatives), financial assets held for investment if there is an active market. If an active market does not exist for financial assets held for investment, the fair value is determined using valuation techniques. Loans and advances to customers and other parties, bank and other loans Loans and advances to customers and other parties, and bank and other loans are repriced at market rates at least annually. Accordingly, their carrying amounts approximate their fair values. Placements with banks and non-bank financial institutions, financial assets held/sold under resale/ repurchase agreements Placements with banks and non-bank financial institutions, financial assets held/sold under resale/ repurchase agreements are mainly priced at market interest rates and mature within one year. Accordingly, the carrying amounts approximate their fair values. Derivatives The fair values of foreign currency and interest rate contracts are either based on their listed market prices or by discount cash flow model at the measurement date. Financial guarantees The fair values of financial guarantees are determined by reference to fees charged in an arm’s length transaction for similar services, when such information is obtainable, or is otherwise estimated by reference to interest rate differentials, by comparing the actual rates charged by lenders when the guarantee is made available with the estimated rates that the lenders would have charged, had the guarantees not been available, where reliable estimates of such information can be made.