Other financial assets Other financial assets include equity securities (publicly traded securities) carried at fair value through OCI (FVOCI) which are not held for trading. The value of the publicly traded securities depends on the share price quoted on the corresponding stock exchange. The Group also has investments in venture funds which are not publicly traded and are carried at fair value through the profit or loss (FVTPL). The value of the venture funds depends on the net asset value of the underlying investments and not directly on a share index. Other financial assets also includes an earn-out receivable acquired from a past business combination. The earn-out will become due based on a variety of factors including future earnings over a period of seven years ending 30 June 2028. The receivable is classified as a financial asset and is remeasured at each reporting period at FVTPL. Interest-bearing and other financial liabilities The carrying amount of the interest-bearing liabilities approximates the fair value, with the exception of the Group's fixed interest rate debt. At 30 June 2024, the total fixed rate debt (excluding lease liabilities) has a carrying amount of $8,180m (2023: $7,353m) and a fair value of $7,571m (2023: $6,684m). Fair value is calculated based on the discounted expected principal and interest cash flows, using rates currently available for debt of similar terms, credit risk and remaining maturities. Other financial liabilities also includes contingent consideration liabilities from past business combinations. These liabilities are recorded as non-current financial liabilities at fair value (Note 13), which are then remeasured at each subsequent reporting date at fair value through profit or loss. The fair value estimations typically depend on factors such as technical milestones or market performance, and are adjusted for the probability of their likelihood of potential future payments, and are appropriately discounted to reflect the impact of time. As at 30 June 2024, the maximum amount of undiscounted potential future milestone payments relating to historical business combinations are $470m (2023: $470m). Key Judgements and Estimates Contingent consideration liabilities are valued with reference to our judgement of the expected probability and timing of potential future milestone payments, based upon level 3 inputs under the fair value hierarchy, which is then discounted to a present value using appropriate discount rates with reference to the Group's incremental borrowing rates. Valuation of financial instruments Financial instruments measured and carried at fair value are categorised as follows: • Level 1: Items traded with quoted prices in active markets for identical liabilities • Level 2: Items with significantly observable inputs other than quoted prices in active markets • Level 3: Items with unobservable inputs (not based on observable market data) The group had the following financial assets and liabilities measured at fair value: 2024 2023 Financial assets/(liabilities) measured at fair value US$m US$m Publicly traded securities – FVOCI Level 1 12 30 Venture fund assets – FVTPL Level 3 126 118 Contingent consideration assets (earn-out receivable) Level 3 25 25 Contingent consideration liabilities from business combinations Level 3 (220) (242) There were no transfers between Level 1 and Level 2 during the year, or any transfers into Level 3. 131
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