Loans and receivables The Corporation's accounts receivable, which consist of trade receivables and accrued interest on loans receivable, are recorded initially at fair value. The Corporation's loans receivable are subsequently measured at amortized cost using the effective interest rate method. The fair value of the Corporation's loans receivable may differ from the carrying value due to changes in interest rates and the underlying risk  associated with the debtor. It is determined using a discounted cash flow analysis. See note 8 for further details. Other liabilities The Corporation's accounts payable and accrued liabilities and loans payable are short-term liabilities with carrying values that approximate their fair values as at December 31, 2013. The Corporation's long-term debt and finance lease obligations are recorded at amortized cost using the effective interest rate method. The carrying  amount of indexed linked borrowings increases annually in line with the retail price index (“RPI”) with accretion being charged to the consolidated  statement of income as interest expense. The fair value of the Corporation's long-term debt is determined using level 1 and level 2 inputs as follows: Use level 1 inputs: Use level 2 inputs: •  Floating rate debt approximates its carrying value. •  Convertible debentures are valued by multiplying the current market debenture price as per the Toronto Stock Exchange by the number of  convertible shares outstanding as at year end. See note 19 for further details. •  Irredeemable preferred shares for Bristol Water plc (shown as debt within these financial statements) are listed on the London Stock Exchange. Their fair value is determined by the quoted market price . •  Fixed-rate debt is determined through the use of a discounted cash flow analysis using relevant risk-free bond rates plus an estimated margin. The carrying value of the Corporation's finance leases approximates fair value. The following table illustrates the classification of the Corporation's financial instruments that have been recorded at fair value as at  December 31, 2013, within the fair value hierarchy: No financial instruments were transferred between levels during the period. 2013 ANNUAL REPORT  73 Level 1 Quoted prices in active  markets for identical assets Level 2 Significant other  observable inputs Level 3 Significant unobservable inputs Dec 31, 2013 Dec 31, 2012 Cash and cash equivalents 45,768 — — 45,768 49,599 Restricted cash 29,547 — — 29,547 19,229 Short-term deposits — — — — 6,471 Recurring measurements: Derivative contract assets: Foreign currency contracts — 450 — 450 849 Interest rate swap contracts — — — — — Embedded derivative asset — — 878 878 1,172 Less: Current portion — (25) — (25) (174) — 425 878 1,303 1,847 Derivative contract liabilities: Interest rate swap contracts — 6,166 — 6,166 15,337 Interest rate swap contracts for hedging — 2,174 — 2,174 3,156 Embedded derivative liability — — 5,500 5,500 12,158 Less: Current portion — (2,219) — (2,219) (3,106) — 6,121 5,500 11,621 27,545 Net, embedded derivative Opening balance, December 31, 2012 (10,986) Other gains and (losses), net included in net income 6,364 Closing balance, December 31, 2013 (4,622) Fair value continuity for level 3 inputs