BIMB Integrated Annual Report 2017

16. INVESTMENT PROPERTIES (CONTINUED) Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. Fair value information Level 1 fair value Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical investment properties that the entity can access at the measurement date. Level 2 fair value Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the investment property, either directly or indirectly. Level 2 fair values of land and buildings have been generally derived using the sales comparison approach. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties. Transfer between Level 1 and 2 fair values There is no transfer between Level 1 and 2 fair values during the financial year. Level 3 fair value Level 3 fair value is estimated using unobservable inputs for the investment property. The following table shows the valuation techniques used in the determination of fair values within Level 3, as well as the significant unobservable inputs used in the valuation models. VALUATION TECHNIQUE Comparison method: The valuation method consider the sales and listing of comparable properties recorded in the area and adjustments are made between the subject properties and those similar properties. The adjustments are made in relation to location and accessibility, size and shape of the lot, physical features, legal and legislation constraints, building design and condition, supply and demand, building code and public restriction. SIGNIFICANT UNOBSERVABLE INPUTS Adjustment rate based on the comparable sales in the past that was analysed by the National Property Information Centre (“NAPIC”) under Valuation and Property Services Department, Ministry of Finance Malaysia. INTER-RELATIONSHIP BETWEEN SIGNIFICANT UNOBSERVABLE INPUTS AND FAIR VALUE MEASUREMENT The estimated fair value would increase/(decrease) if: – the rate were higher or lower – the historical sales transaction were higher or lower NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2017 212 BIMB HOLDINGS BERHAD Integrated Annual Report 2017