Page 148 - Continental Reinsurance 2022 Annual Report

146 Notes to the Consolidated and separate financial statement - continued

For the year ended 31 December 2022

Determination of fair value of nancial instruments.
Valuation techniques used to derive Level2 fair values
Level 2 fair values of investments have been generally derived using the Market approach.
Belowis a table showing sensitivity analysis of material unquoted investments categorised as Level 2 fair values.

Description Fair value at Valuation Observable Fair value if Fair value Relationship of
31 December Technique Inputs inputs if inputs unobservable
Investment in Aveni 2022 increased by decreased by inputs to
Reinsurance N'000 5% 5%
N'000 N'000
Investment in Uganda
Reinsurance 334,123 Adjusted fair Median of P/B 350,829 317,417 The higher the
value multiples of illiquidity ratio
Investment in Africa comparison comparable and the earnings
Reinsurance approach companies per share haircut
adjustment the
Investment in Imperial homes lower the fair
value.
Ivestment in Food Concept
217,114 Adjusted fair Median of P/B 227,970 206,258 The higher the
value multiples of 66,026 59,737 illiquidity ratio
comparison comparable 13,125 and the earnings
approach companies 11,875 per share haircut
adjustment the
62,881 Adjusted fair Median of P/B lower the fair
value multiples of value.
comparison comparable
approach companies The higher the
illiquidity ratio
12,500 Adjusted fair Median of P/B and the earnings
value multiples of per share haircut
comparison comparable adjustment the
approach companies lower the fair
value.

The higher the
illiquidity ratio
and the earnings
per share haircut
adjustment the
lower the fair
value.

5,400 This are fully This are fully 5,670 5,130 This are fully
impaired asset impaired asset impaired asset

Level 3 fair values of investments have been generally derived using the adjusted fair value comparison approach. Price per book value ratios of
comparable entities in a similar industry were obtained and adjusted for key factors to reect estimated ratios of the investment being valued.
Adjusting factors used are the llliquidity Discount which assumes a reduced earning on private entity in comparison to a publicly quoted entity and
Non controlling Discount which assumes the equity is valued from the minority interest perspective.