FGV Audited Financial Statements 2020

4 FINANCIAL RISK MANAGEMENT (CONTINUED) (c) Fair value estimation (continued) (iii) Financial instruments in Level 3 The following table present the changes in recurring Level 3 financial instruments during the financial year: Group 2020 RM’000 2019 RM’000 LLA liability At 1 January 4,316,146 4,328,008 Fair value changes charged to profit or loss 158,490 236,821 Repayment during the financial year (260,812) (248,683) At 31 December 4,213,824 4,316,146 Financial assets at fair value through other comprehensive income At 1 January 103,686 82,634 Additions 3,521 8,034 Disposal (14,007) - Fair value changes 47,588 13,018 Currency translation differences (103) - At 31 December 140,685 103,686 (d) Offsetting financial assets and financial liabilities There are no offsetting of financial assets and financial liabilities during the financial year for the Group and Company. 5 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS Estimates and judgments are continually evaluated by Directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (i) LLA liability The fair value of the LLA liability is measured using a discounted cash flow projections based on financial budgets approved by the Directors covering a 91 year period. As a result of the fair value assessment, the Group has recognised a LLA liability of RM4,213,824,000 (2019: RM4,316,146,000). The key assumptions and the sensitivity analysis are as disclosed in Note 48 to the financial statements. 68 Notes to the Financial Statements For The Financial Year Ended 31 December 2020 FGV HOLDINGS BERHAD Audited Financial Statement 2020