Annual Report 2020

China Merchants China Direct Investments Limited Annual Report 2020 114 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2020 5. FINANCIAL INSTRUMENTS (CONTINUED) Fair value measurement of financial instruments (continued) Fair value of the Group’s financial assets and financial liabilities that are measured at fair value on a recurring basis (continued) Reconciliation of Level 3 fair value measurements of financial assets: (continued) Of the total gains for the year included in profit or loss, gain of US$75,272,243 (2019: US$17,769,642) relates to financial assets at FVTPL categorised in Level 3 held at year end. Fair value gains or losses on financial assets at FVTPL are included in “Net gain on financial assets at fair value through profit or loss”. Transfers between levels of the fair value measurement hierarchy are recognised as of the date of the event or change in circumstances that caused the transfer. In the years of 2020 and 2019, part of listed shares of Oriental Pearl Media Co., Ltd. (“ Oriental Pearl ”) held by the Group, which were classified as financial assets at FVTPL and subject to trading moratorium before, became freely tradeable and thus were transferred from Level 3 to Level 1 during the year. In the year of 2020, the investment deposits related to Anhui iFlytek Healthcare Information Technology Co., Ltd. (“ iFlytek Healthcare ”) and China UnionPay Co., Ltd. (“ China UnionPay ”), which were classified as investment deposits at FVTPL for year ended 31 December 2019, were transferred from investment deposits to unlisted equities since the transfers of legal title of shareholding were duly completed during the year. The valuation technique for the fair value of iFlytek Healthcare and China UnionPay has changed due to the lack of recent transaction price of the financial assets for reference. The fair value of these investments is determined based on significant unobservable inputs and involved significant judgment made by the management. Thus, the instruments were transferred from Level 2 to Level 3 category.