Valuation Policy
Investment properties are measured at fair
value and revalued on a regular basis to ensure the carrying amount
of each property does not differ materially from its fair value at
the balance date. Consistent with the requirement to
independently value each property on a regular basis each property
is independently valued every three years. The valuations are
undertaken on an annual rolling basis. Independent valuations are
prepared using both the capitalisation of net income method and/or
the discounting of future net cash flows to their present
value.
Fair value of investment property is the price
at which the property could be exchanged between knowledgeable,
willing parties in an arm’s length transaction. A “willing seller”
is not a forced seller prepared to sell at any price. The best
evidence of fair value is given by current prices in an active
market for similar property in the same location and
condition. The fair value of investment property
has been updated to reflect financial market conditions at the end
of the reporting period. While this represents best estimates as at
balance sheet date, if the investment property is sold in future
the price achieved may be higher or lower than the most recent
valuation.
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