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## Notes to the financial statements 

for the financial year ended 31 March 2014 continued 

## Note 39 Fair values of financial assets and liabilities continued 

## Reconciliation of balances in Level 3 of the fair value hierarchy 

The following table reconciles the balances in Level 3 of the fair value hierarchy for the Consolidated Entity for the financial years ended 31 March 2014 and 31 March 2013: 

<img src='content_image/201776.jpg'>

<img src='content_image/201777.jpg'>

 (1) The consolidated entity employs various hedging techniques in order to manage risks, including risks in Level 3 positions. Such techniques may include the purchase or sale of financial instruments that are classified as Levels 1 and/or 2. The realised and unrealised gains and losses for assets and liabilities in Level 3 presented in the table above do not reflect the related realised or unrealised gains and losses arising on economic hedging instruments classified in Level 1 and/or 2. (2) 

The derivative financial instruments in the table above are represented on a net basis. On a gross basis derivative assets are $98 million (2013: $68 million) and derivative liabilities are $87 million (2013: $45 million). 

