Annual Report 2019

China Merchants China Direct Investments Limited Annual Report 2019 102 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) For the year ended 31 December 2019 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: Financial assets at FVTPL US$ Balance at 1 January 2018 461,486,344 Losses recognised in profit or loss (63,374,348) Exchange difference arising on translation to presentation currency (17,498,512) Purchases 19,874,030 Return of capital (2,403,866) Transfer out of Level 3 to Level 1 (11,610,258) Balance at 31 December 2018 386,473,390 Balance at 1 January 2019 386,473,390 Gains recognised in profit or loss 19,600,225 Exchange difference arising on translation to presentation currency (5,474,841) Purchases 5,409,313 Return of capital (29,029,919) Transfer out of Level 3 to Level 1 (6,745,846) Balance at 31 December 2019 370,232,322 Of the total gains for the year included in profit or loss, gain of US$17,769,642 (2018: loss of US$64,938,544) 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 (loss) 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. During the year ended 31 December 2019 and 2018, the Group’s financial assets at FVTPL were transferred from Level 3 to Level 1 since the lock-up period for those assets (i.e. listed shares with quoted bid prices in active market) has expired during the year.