Notes to Consolidated Financial Statements continued Thousands of Georgian Lari 28. Fair Value Measurements continued Fair value hierarchy continued Trading securities and investment securities Trading securities and a certain part of investment securities are quoted equity and debt securities. Investment securities valued using a valuation technique or pricing models consist of unquoted equity and debt securities. These securities are valued using models which sometimes only incorporate data observable in the market and at other times use both observable and non-observable data. The non-observable inputs to the models include assumptions regarding the future financial performance of the investee, its risk profile, and economic assumptions regarding the industry and geographical jurisdiction in which the investee operates. Movements in Level 3 financial instruments measured at fair value The following tables show a reconciliation of the opening and closing amounts of Level 3 financial assets which are recorded at fair value: Purchase Other Purchase At (sale) of At At 31 December comprehensive Reclassification of AFS 31 December AFS 31 December Sale of 31 December 2015 income to associates securities 2016 securities 2017 securities 2018 Level 3 financial assets Equity investment securities 1,448 9,626 (9,626) 949 2,397 (1,059) 1,338 (943) 395 Movements in Level 3 non-financial assets measured at fair value All investment properties are Level 3. Reconciliations of their opening and closing amounts are provided in Note 11. Impact on fair value of Level 3 financial instruments measured at fair value of changes to key assumptions The following table shows the impact on the fair value of Level 3 instruments when using reasonably possible alternative assumptions: 2018 2017 2016 Effect of Effect of Effect of reasonably reasonably reasonably possible possible possible Carrying alternative Carrying alternative Carrying alternative amount assumptions amount assumptions amount assumptions Level 3 financial assets Equity investment securities 395 +/ – 59 1,338 +/ – 200 2,397 +/ – 359 In order to determine reasonably possible alternative assumptions the Group, adjusted key unobservable model inputs are as follows: For equities, the Group adjusted the price-over-book-value multiple by increasing and decreasing the ratio by 10%, which is considered by the Group to be within a range of reasonably possible alternatives based on the price-over-book-value multiples used across peers within the same geographic area of the same industry. 272 Annual Report 2018Bank of Georgia Group PLC