Strategic Report Strategic Report Strategic Report Financial Additional Overview Strategy Performance Governance Statements Information 28. Fair Value Measurements continued Fair value hierarchy continued 31 December 2016 Level 1 Level 2 Level 3 Total Assets measured at fair value Total investment properties – – 288,227 288,227 Land – – 118,765 118,765 Residential properties – – 82,003 82,003 Non-residential properties – – 87,459 87,459 Investment securities – 1,283,606 2,397 1,286,003 Other assets – derivative financial assets – 1,466 – 1,466 Other assets – trading securities owned 1,396 – – 1,396 Total revalued property – – 594,619 594,619 Hospitals and clinics – – 401,053 401,053 Infrastructure assets – – 193,566 193,566 Assets for which fair values are disclosed Cash and cash equivalents – 1,573,610 – 1,573,610 Amounts due from credit institutions – 1,054,983 – 1,054,983 Loans to customers and finance lease receivables – – 6,725,662 6,725,662 Liabilities measured at fair value Other liabilities – derivative financial liabilities – 9,411 – 9,411 Liabilities for which fair values are disclosed Client deposits and notes – 5,388,768 – 5,388,768 Amounts owed to credit institutions – 3,272,454 197,637 3,470,091 Debt securities issued – 996,164 318,236 1,314,400 The following is a description of the determination of fair value for financial instruments which are recorded at fair value using valuation techniques. These incorporate the Group’s estimate of assumptions that a market participant would make when valuing the instruments. Derivative financial instruments Derivative financial instruments valued using a valuation technique with market observable inputs are mainly interest rate swaps, currency swaps, forward foreign exchange contracts and option contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations, as well as standard option pricing models. The models incorporate various inputs including the credit quality of counterparties, foreign exchange spot and forward rates, interest rate curves and implied volatilities. Annual Report 2018Bank of Georgia Group PLC 271