NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2015
149
ANNUAL REPORT 2015
43.
FAIR VALUE OF ASSETS AND LIABILITIES (CONT’D)
D.
Level 3 fair value measurements (cont’d)
ii)
Movements in Level 3 assets and liabilities measured at fair value (cont’d)
Group
2014
$’000
(Restated)
Fair value measurement using significant
unobservable inputs (Level 3)
Land and
buildings
Investment
properties
Non-
current
assets held
for sale
At 1 January
16,766 849,910
–
Total gains or losses for the period
1,510
(4,021)
–
Transfer in
163
–
–
Depreciation
(307)
–
–
Additions
117
2,173
–
Disposals
– (405,000)
–
Reclassification
– (42,317)
42,317
Sale of a subsidiary
(613)
–
–
Exchange adjustment
(324)
(982)
–
At 31 December
17,312 399,763
42,317
Total gains or losses for the period included in
Other comprehensive income:
– Net surplus on revaluation of land and buildings
1,510
–
–
iii)
Valuation policies and procedures
It is the Group’s policy to engage external valuation experts to perform the valuation. The management is
responsible for selecting and engaging valuation experts that possess the relevant credentials and knowledge
on the subject of valuation, valuation methodologies, and FRS 113 fair value measurement guidance.
The Group revalues its properties and the valuation techniques used are as follows:
a)
Comparison method that considers the sales of similar properties that have been transacted in the
open market with adjustment made for differences in factors that affect value.
b)
Depreciated replacement cost method that is based on an estimate of the current market value of the
land, plus the current gross replacement of improvements, less allowances for physical deterioration,
obsolescence and optimisation.
c)
The income capitalisation method is based on the capitalisation of net rental income taking into
consideration such as vacancy rates, rental growth rates to arrive at the capital value. The net rental
income is derived after deducting expenses and property related taxes from the gross rent.
d)
The discounted cash flow method involves the estimation of net income stream over a period and
discounting the net income stream; taking into consideration a range of assumptions such as terminal
yield rate, discount rate and rental growth.
