Notes to the financial statements |

17. Financial instruments

Te Wānanga o Aotearoa's activities expose it to a variety of financial risks (market risk, liquidity risk and credit risk). Te Wānanga o Aotearoa's risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of Te Wānanga o Aotearoa. Te Wānanga o Aotearoa uses derivative financial instruments such as interest rate swaps and forward foreign exchange contracts to hedge certain risk exposures.

(a) Financial instrument categories

The estimated carrying amount and fair values of Te Wānanga o Aotearoa's financial assets and liabilities are presented as follows:

(b) Fair value hierarchy

For those instruments recognised at fair value in the statement of financial position, fair values are determined according to the following hierarchy:

› Quoted market price (level 1) – Financial instruments with quoted prices for identical instruments in active markets.

› Valuation technique using observable inputs (level 2) – Financial instruments with quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in inactive markets and financial instruments valued using models where all significant inputs are observable.

› Valuation techniques with significant non-observable inputs (level 3) – Financial instruments valued using models where one or more significant inputs are not observable.