SEO Version
FORTERRA
ANNUAL REPORT 2013
NOTES TO THE
FINANCIAL STATEMENTS
139
30 DETERMINATION OF FAIR VALUES (CONTINUED)
Accounting classifications and fair values (Continued)
Financial assets and financial liabilities not carried at fair value but for which fair values are
disclosed* (Continued)
The following table shows the key unobservable inputs used in the valuation models:
Type
Valuation
techniques
Unobservable inputs
Inter-relationship
between key
unobservable inputs and
fair value measurement
Investment
properties
Discounted
cash flow
approach
Discount rate ranging
from 8% to 10%
A significant increase/
decrease in discount
rate would result in a
significantly lower/higher
fair value measurement.
Direct
capitalisation
approach
Capitalisation rate/yield
ranging from 4% to 8%
A significant increase/
decrease in capitalisation
rate would result in a
significantly lower/higher
fair value measurement.
Direct
comparison
method
Sale price ranging from
RMB37,000 to RMB48,000
per sqm for the office units in
Shanghai; Sale price ranging
from RMB41,000 to RMB109,000
per sqm for the retail property
units in Shanghai; sale price at
RMB4,600 per sqm for Beijing
Logistics Park; sale price ranging
from RMB15,000 to RMB20,000
per sqm for the 4 phases of
Central Park Mall
A significant increase in
average sale prices would
result in a significantly
higher fair value
measurement.
Valuation process applied by the Group
The fair value of investment properties is determined by external and independent property
valuers, having appropriate recognised professional qualifications and recent experience in the
location and category of property being valued. The valuers provide the fair value of the Group’s
investment property portfolio every six months.
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