31dfa1d2-3224-4dd7-a957-281a51cc7802

NOOSA SHIRE COUNCIL

Notes to the financial statements
For the six months ending 30 June 2014

        (ii) Valuation techniques used to derive fair values for Jevel 2 and level 3 valuations
                   Council adopted 44SB/3 Fair Value Measurement this financial year and has reviewed each valuation to ensure compliance with the requirements of
                   the new standard. There have been no changes in valuation techniques as a result of this review.

        Specific valuation techniques used to value Council assets comprise:
        Property, plant and equipment
              Land (level 2)
                   Land fair values were determined by an independent valuer, AssetVal Pty Ltd effective 1 January 2014. Level 2 valuation inputs were used to value land
                   in freehold title as well as land used for special purposes, which is restricted in use under current zoning rules. Sales prices of comparable land sites in
                   close proximity are adjusted for differences in key attributes such as property size, The most significant inputs into this valuation approach are price per
                   square metre.

              Buildings (ievel 3)
                   A review of the fair value of buildings was undertaken effective 1 January 2014 using the non residential cast of construction index rates. The index
                   showed an decrease of -0.697% since 30 June 2013. This index was used to determine the fair-value of the buildings as at | January 2014

                    In determining the level of accumulated depreciation the asset has been disaggregated into significant components which exhibit useful lives,
                   Allowance has been made for the typical asset life cycle and renewal treatments of each component, the residual value at the time the asset is
                   considered to be no longer available for use and the condition of the asset. Condition was assessed taking into account both physical charactenstics as
                   well as holistic factors such as functionality, capability, utilisation and obsolescence.

                   The last comprehensive revaluation of Buildings was completed by Australian Pacific Valuers under the auspices of Sunshine Coast Regional Council
                   as at 30 June 2012.

                    A review of market data obtained from the Australian Bureau of Statistics, Non residential cost of Construction Queensland Index rates for the period |
                   January 2014 to 30 June 2014 shows no significant material changes and therefore the values are considered still at fair value.
              Infrastructure assets (level 3)
                    All Council infrastructure assets were fair valued using written down current replacement cost (CRC), This valuation comprises the asset's current
                    replacement cost (CRC) Jess accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic
                    benefits of the asset. Council first determined the gross cost of replacing the full service potential of the asset and then adjusted this amount to take
                    account of the expired service potential of the asset.
                    CRC was measured by reference to the lowest cost at which the gross future economic benefits of the asset could currently be obtained in the normal
                    course of business. Where existing assets were over designed, had excess capacity, or were redundant an adjustment was made so that the resulting
                    valuation reflected the cost of replacing the existing economic benefits based on an efficient set of modern equivalent assets to achieve the required
                    level of service output within the council's planning horizon.
              Specific valuation techniques used to value Council infrastructure assets comprise:
               1(a} Road and Bridge Network - calculation of current replacement cost
                    Reads
                    Current replacement cost:
                    Roads Infrastructure fair values were determined by an independent valuer, Aurecon Australia Pty Lid effective 1 January 2014. The valuation
                    technique used to determine fair value is essentially based on price modelling of the fair value through ‘Level 3' uncbservable inputs.
                    Assets have been valued on the basis of fair value in accordance with the requirements of applicable Australian Accounting Standards, in particular
                    AASB 116 "Property, Plaut & Equipment and AASB 13 'Fair Value Measurement.                                           ,
                    The fair-value unit rate was determined using the prevailing market cost for supply and installation of similar assets or their modern equivalent. The
                    unit rates were predominantly developed from first principles by estimating the plant, material and labour required for asset replacement. The base
                    rates were sourced from focal suppliers estimates and quotes, contract schedules for work recently completed and council records, Where costs have
                    not been readily available then rates were obtained from Aurecon's cost database or the Rawlinson 2014 edition of the Australian Construction
                    Handbook.
                    Council uses 3 distinct location factors categorising its road infrastructure into urban, rural and commercial / industrial. Roads are further categorised
                    as sealed or unseated and managed in segments. Al] road segments are then further componentised into the sub classes of assets that make up eaclt
                    segment, i.e. Road Surface, Road pavement - base, Road pavement - sub-base. Road shoulder, Formation, Kerbs, footpaths etc, Each asset unit rate is
                    determined on cost to construct, material type and useful life to facilitate valuation and depreciation

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