TAN CHONG MOTOR HOLDINGS BERHAD
Annual Report 2014
74
NOTES TO THE FINANCIAL STATEMENTS
3.
Property, plant and equipment (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.
Valuation process applied by the Group
The fair value of land and buildings is determined by external, independent property valuers, having appropriate
recognised professional qualifications and recent experience in the location and category of property being valued.
Level 1 fair value
Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical land and buildings 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
land and buildings, 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 Level 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 inputs with significant adjustments for the land and buildings.
Fair values of land and buildings have been generally derived using the sales comparison and depreciated replacement
cost approach. In 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. Depreciated replacement cost approach is based on how much it would cost to
reproduce the property after adjusting for depreciation.
Titles
The titles to certain properties with a total cost of RM13,578,000 (2013: RM11,545,000) have yet to be issued by the
relevant authorities.
