46 (Expressed in Trinidad and Tobago Dollars) NOTES TO THE SPECIAL PURPOSE FINANCIAL STATEMENTS 30th June 2017 4 Summary of significant accounting policies (continued) n. Determination of fair values (continued) (i) Financial assets at fair value through profit or loss 30 June 2017 Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000 Investment securities Bonds 356,359 7,895,171 116,233 8,367,763 Equities 10,457,678 378,851 56,751 10,893,280 Mutual funds 873,526 – 51,988 925,514 11,687,563 8,274,022 224,972 20,186,557 30 June 2016 Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000 Investment securities Bonds 311,410 7,453,672 549,232 8,314,314 Equities 9,154,986 372,445 56,742 9,584,173 Mutual funds 979,221 – 51,228 1,030,449 10,445,617 7,826,117 657,202 18,928,936 Movements in Level 3 financial instruments measured at fair value 2017 2016 $’000 $’000 Balance beginning of period 657,202 1,396,897 Foreign asset cash – – Bond adjustment correction – 24 Purchases 117,582 1,054,702 Repayments (549,232) (1,789,638) Transfer out – – Net unrealised (loss)/gain (580) (4,783) Balance at end of period 224,972 657,202 Transfers between Level 2 and 3 (ii) Investment in subsidiaries An external, independent valuation company, having appropriate recognised professional qualifications and experience was contracted to value NIBTT’s investment in subsidiaries. In determining the value of subsidiaries, three (3) valuation methods were considered. Under the market approach, the trading multiples method was applied; under the cost approach, the based valuation method and under the income approach, the excess return model was used. The values derived from these approaches were considered baseline. The baseline values were then applied using an average of the lows and highs of each method. A price range was created and from these scenarios a point estimate was derived using probability estimates for each scenario.