214
CapitaLand Limited
Annual Report 2015
Notes to the Financial Statements
34 Fair Value of Assets and Liabilities
(continued)
(d) Level 3 fair value measurements
(continued)
(ii) Valuation techniques and significant unobservable inputs
(continued)
Type
Valuation
methods
Key unobservable inputs
Inter-relationship
between key
unobservable
inputs and fair value
measurement
Assets held
for sale
1
Direct
comparison
and income
capitalisation
approaches
- Comparable price:
$9,069 per square metre
(2014: $8,656 per square metre)
- Capitalisation rate:
3.5% (2014: 4.3%)
The estimated
fair value varies
inversely against the
capitalisation rate and
increases with the
higher comparable
price.
Financial asset
designated at
fair value through
profit or loss
Income
approach
- Ordinary share price:
US$0.70 to US$1.09
- Volatility of comparable companies:
39.7% to 46.0%
The estimated fair value
increases with higher
share price and
volatility.
1
The key unobservable input for one of the assets held for sale in 2014 was the agreed contractual selling price.
The fair value of available-for-sale unquoted equity securities was estimated based on the fair value of the
underlying investment property of the investee company. The valuation was based on discounted cash flow
approach and its significant unobservable inputs were consistent with the information as presented above.
Management considers that any reasonably possible changes to the unobservable input will not result in a
significant financial impact.
(iii) Valuation processes applied by the Group
The significant non-financial asset of the Group categorised within Level 3 of the fair value hierarchy is investment
properties. The fair values of investment properties are determined by external, independent property valuers,
who have the appropriate and recognised professional qualifications and recent experience in the location
and category of property being valued. The property valuers provide the fair values of the Group’s investment
property portfolio every six months. The valuation and its financial impact are discussed with the Audit
Committee and Board of Directors in accordance with the Group’s reporting policies.
