2015-10-14 Audit & Risk Committee Meeting - Draft Annual Financial Statements

NOOSA SHIRE COUNCIL

Notes to the financial statements
For the year ended 30 June 2015
 14 Fair value measurements continued

                                                              Level 2              Level 3
                                                            (significant         (significant
                                                               other            unobservable
                                                                                                       Total
                                                            observable             inputs)
     As at 30 June 2014                                       inputs)

     Property, plant and equipment
        - Land                                                  65,314,000        55,631,066        120,945,066
        - Buildings                                                               59,359,897         59,359,897
        - Road and Bridge Network                                                525,690,984        525,690,984
        - Storm Water                                                            104,337,298        104,337,298
        - Other Infrastructure Assets                                             54,356,557         54,356,557
                                                                65,314,000       799,375,802


     There were no transfers between level 2 and 3 during the financial year.

     Council's policy is to recognise transfers in and out of the fair value hierarchy levels as at the end of the
     reporting period.

     (ii) Valuation techniques used to value Council assets comprise:

     Land (level 2 and 3)
     Land fair values were determined by independent valuer, AssetVal Pty Ltd effective 1 January 2014.
     Fair values have been derived based on a combination of market approach and direct comparison
     by analysing land sales occurring over the past year within the Noosa Shire Council area.

     Where there was an active and liquid market as evidenced by sales transactions of similar property types,
     a market approach by way of direct comparison or income methods can be utilised, and are accepted
     valuation methodologies under AASB 13. If a market approach is adopted, the valuation is deemed to be
     a Level 2 input.

     The direct comparison method which is considered a Level 2 input on the fair value hierarchy, involves the
     analysis of sales evidence and comparisons with the subject land taking into account matters such as
     area, location and other general site characteristics. Direct Comparison approach was utilised in the
     assessment for all Council land assets, however, the fair value measurement has been either a Level 2
     or 3, depending on the assumptions as to:

     -   Whether the land is subject to restrictions as to use and/or sale;
     -   Whether there is no active market.

     If the above assumptions applied to the land as per Queensland Treasury NCAP 3, fair value has been
     assessed as a Level 3. However if an active market was established and there are no unreasonable
     restrictions as to use and/or sale, measurement was deemed to be a Level 2.

     Land that is utilised for footpath or access restriction purposes, land that is a volumetric title, or due to
     its general characteristics land that has no observable active market have been assessed as a Level 3.

     Buildings (level 3)
     For the majority of Council's buildings, there is no active market due to the specialised nature of the assets
     and the services they provide. The fair value of buildings were independently valued by registered valuers
     Australia Pacific Valuers, effective 30 June 2015.




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