The following table provides the carrying amount of financial instruments by category as defined in IFRS 9 and by balance sheet heading. The table sets out the fair values of financial instruments (including derivatives) using the valuation methods and assumptions referred to below the table. The table does not include assets and liabilities that are not considered financial instruments. The table also excludes assets and liabilities which are considered financial instruments, but are not recorded at fair value and for which the carrying amount approximates fair value.
October 31, 2023
Total Carrying Amount
Fair Value Under Carrying Amount
Amortized Cost
Derivatives
FVOCI
FVTPL
Fair Value
Financial Assets Cash resources
(Note 3) $
- $
66,524 $
149,285 $
- $
215,809 $
215,809 $
-
Securities (2)
-
-
3,893,905
14,901
3,908,806
3,908,806
-
(Note 4)
Securities purchased under resale agreements
134,662
134,662
134,662
-
Loans (3)
-
37,252,238
-
37,252,238
36,877,469
(374,769)
Derivatives
109,290
-
-
109,290
109,290
-
Total Financial Assets
$
109,290 $
37,453,424 $
4,043,190 $
14,901 $ 41,620,805 $
41,246,036 $
(374,769)
Financial Liabilities Deposits (3)
$
- $
33,355,538 $
-
$ 33,355,538 $
32,963,151 $
(392,387)
Debt
-
3,839,159
-
3,839,159
3,817,442
(21,717)
Derivatives
198,596
-
-
198,596
198,596
-
Total Financial Liabilities
$
198,596 $
37,194,697 $
-
$ 37,393,293 $
36,979,189 $
(414,104)
October 31, 2022
Amortized Cost
Total Carrying Amount
Fair Value Under Carrying Amount
Derivatives
FVOCI
FVTPL
Fair Value
Financial Assets Cash resources
(Note 3) $
- $
89,146 $
26,833 $
- $
115,979 $
115,979 $
-
Securities (2)
-
-
4,518,795
-
4,518,795
4,518,795
-
(Note 4)
Loans (3)
-
35,938,139
-
-
35,938,139
35,478,626
(459,513)
Derivatives
110,521
-
-
-
110,521
110,521
-
Total Financial Assets
$
110,521 $
36,027,285 $
4,545,628 $
- $ 40,683,434 $
40,223,921 $
(459,513)
Financial Liabilities Deposits (3)
$
- $
33,034,978 $
- $
- $ 33,034,978 $
32,414,786 $
(620,192)
Securities sold under repurchase agreements
-
247,354
-
-
247,354
247,354
-
Debt
-
3,461,899
-
-
3,461,899
3,417,350
(44,549)
Derivatives
156,081
-
-
-
156,081
156,081
-
Total Financial Liabilities
$
156,081 $
36,744,231 $
- $
- $ 36,900,312 $
36,235,571 $
(664,741)
(1) For further information on interest rates associated with financial assets and liabilities, including derivative instruments, refer to Note 22. (2) Securities are comprised of $3,893,905 (2022 - $4,508,490) measured at FVOCI and $nil (2022 - $10,305) designated at FVOCI. (3) Loans and deposits exclude deferred premiums, deferred revenue and allowance for credit losses, which are not financial instruments.
The methods and assumptions used to estimate the fair values of financial instruments are as follows:
• Interest bearing deposits with financial institutions and securities are reported on the consolidated balance sheets at the fair value disclosed in Notes 3 and 4. Remaining cash resources and securities purchased under resale agreements are reported at amortized cost, which is equal to fair value, on the consolidated balance sheets. These values are based on quoted market prices, if available. Where a quoted market price is not readily available, other valuation techniques are based on observable market rates used to estimate fair value. • Fair value of loans reflect changes in the general level of interest rates that have occurred since the loans were originated and exclude the allowance for credit losses. Fair value is estimated by discounting the expected future cash flows of these loans at current market rates for loans with similar terms and risks. • With the exception of derivative financial instruments and contingent consideration, financial instruments included within other assets and other liabilities reported on the consolidated balance sheets have carrying values that closely approximate fair value. • For derivative financial instruments where an active market does not exist, fair values are determined using valuation techniques that refer to observable market data, including discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants. • The estimated fair values of deposits are determined by discounting the contractual cash flows at current market rates for deposits of similar terms. • The fair values of debt are determined by reference to current market prices for debt with similar terms and risks.
Fair values are based on our best estimates based on market conditions and pricing policies at a certain point in time. The estimates are subjective and involve particular assumptions and matters of judgment and, as such, may not be reflective of future fair values.
102 | CWB Financial Group 2023 Annual Report
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