Financial instruments
For the year ended 31 May
Contingent consideration, included in trade and other payables, are level 3 financial liabilities.
Changes in level 3 instruments are as follows:
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| 2016 R’000 |
2015 R’000 |
|||
|---|---|---|---|---|
| Contingent consideration | ||||
| Opening balance | 123 902 | 22 607 | ||
| Acquisition of Viamedia Proprietary Limited | — | 84 783 | ||
| Acquisition of SupaPesa Africa Limited | — | 29 851 | ||
| Acquisition of Supa Pesa South Africa Proprietary Limited | — | 100 | ||
| Settlements | (1 931) | (19 515) | ||
| Gains and losses recognised in profit or loss | (38 408) | 6 076 | ||
| Closing balance | 83 563 | 123 902 | ||
| Total gains or losses for the period included in profit or loss for liabilities held at the end of the reporting period, under: | ||||
| Other income | (48 120) | (923) | ||
| Interest paid | 9 712 | 6 999 | ||
| Change in unrealised gains or losses for the period included in profit or loss for liabilities held at the end of the reporting period | 9 127 | 2 052 |
The fair value of the contingent consideration is estimated by applying the income approach. The fair value is based on the discount rates applicable to the Group and management’s probability assumptions on certain warranties being achieved. There have been no changes in management’s probability assumptions. The discount rate has been increased in line with the increase in the prime lending rate. The resulting changes in the fair values are accounted for in finance costs in the income statement.
The Group has not disclosed the fair values of all financial instruments measured at amortised cost, as their carrying amounts closely approximate their fair values.