Company: WEBNF
Filing Date: 2025-11-04
Form Type: 20-F
Source: 0001104659-25-105894
Chunk: 97

Company: WESTPAC BANKING CORP
Filing Date: 2025-11-04
Form: 20-F
Item: Item 14
Chunk 97
---
 Fair Valuation Control Framework where the fair value is either determined or validated by a function independent of the transaction. This framework formalises the policies and procedures used to achieve compliance with relevant accounting, industry and regulatory standards. The framework includes specific controls relating to:

●   The revaluation of financial instruments;
---------------------------------------------

●   Independent price verification;
-----------------------------------

●   Fair value adjustments; and
-------------------------------

●   Financial reporting.
------------------------
A key element of the framework is the Revaluation Committee, comprising senior valuation specialists from within Westpac. The Revaluation Committee reviews the application of the agreed policies and procedures to assess that a fair value measurement basis has been applied.
The method of determining fair value differs depending on the information available.
Fair value hierarchyA financial instrument’s categorisation within the valuation hierarchy is based on the lowest level input that is significant to the fair value measurement.
Westpac categorises all fair value instruments according to the hierarchy described below.
Valuation techniquesWestpac applies market accepted valuation techniques in determining the fair valuation of over the counter (OTC) derivatives. This includes CVA and FVA, which incorporate credit risk and funding costs and benefits that arise primarily in relation to uncollateralised derivative positions, respectively.
The specific valuation techniques, the observability of the inputs used in valuation models and the subsequent classification for each significant product category are outlined as follows:

​

               ​                
--------------------------------
WESTPAC GROUP 2025 ANNUAL REPORT
​
NOTES TO THE FINANCIAL STATEMENTS

Note 22.Fair values of financial assets and financial liabilities (Continued)
Level 1 instruments (Level 1)
The fair value of financial instruments traded in active markets is based on recent unadjusted quoted prices. These prices are based on actual arm’s length basis transactions.
The valuations of Level 1 instruments require little or no management judgement.

       Instrument                                                        Balance sheet category                                                                                               Includes                                                                                                                           Valuation                                                                       
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Exchange traded products   ​   Derivatives                                                                                                 ​   Exchange traded interest rate futures and options and commodity and carbon futures                      ​   ​                                                                                                                                                     
FX products                ​   Derivatives                                                                                                 ​   FX spot and futures contracts                                                                           ​   ​                                                                                                                                                     
Equity products            ​   DerivativesTrading securities and financial assets measured at FVISOther financial liabilities              ​   Listed equities and equity indices                                                                      ​   All these instruments are traded in liquid, active markets where prices are readily observable. No modelling or assumptions are used in the