Annual Report 2015-16

Financial Statements 2016

Noosa Shire Council

Notes to the Financial Statements
 for the year ended 30 June 2016
Note 12. Fair Value Measurements (continued)

(3) Valuation techniques used to derive Level 2 and Level 3 Fair Values

Where Council is unable to derive Fair Valuations using quoted market prices of identical assets
(ie. Level 1 inputs) Council instead utilises a spread of both observable inputs (Level 2 inputs) and
unobservable inputs (Level 3 inputs).

The Fair Valuation techniques Council has employed while utilising Level 2 and Level 3 inputs are as follows:

Infrastructure, Property, Plant and Equipment

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.

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.

Asset Val Pty Ltd were engaged to undertake an indexation assessment across all non current asset categories with the
exception of Other Infrastructure as at 30 June 2016. It was determined that land index rates for the period 1 January
2014 to 30 June 2016 showed a material increase of 11% in level 2 inputs and 0% for level 3 inputs. As a result of this
assessment a desktop revaluation was applied reflecting these indicies.

                                                                                                        page 24