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Annual Report 2015 Motor Accidents (Compensation) Commission (MACC)



Annual Report 2015 Motor Accidents (Compensation) Commission (MACC)

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Tabled paper 1556


Tabled Papers for 12th Assembly 2012 - 2016; Tabled Papers; ParliamentNT






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Northern Territory Motor Accidents (Compensation) Commission Notes to the Financial Statements - 30 June 2015Annual Report 2015 Page 97 Motor Accidents (Compensation) Commission Notes to the Financial Statements 30 June 2015 Motor Accidents (Compensation) Commission Annual Report 2014/2015 83 34. Investment Property 2015 2014 $000 $000 Reclassification from Property, Plant and Equipment 43,500 - Additions 118 - Revaluation of Property, Plant and Equipment (618) - 43,000 - Prior to 1 January 2015, there was no property held for investment. The property located at 24 Mitchell Street, Darwin has been reclassified from property, plant and equipment (see Note 16) to investment property, following the change of ownership associated with the transfer of TIO Insurance and Banking business to owners. The transfer changed the status of the property from owner occupied to investment properties. Measurement of fair value (i) Fair value hierarchy The fair value of MACCs property held for investment as at 30 June 2015 has been determined and approved by the MAC Commissioner on the basis of an independent valuation carried out at that date by Nick Bell of Knight Frank Valuations who is a certified practicing valuer of the Australian Valuation Office. The independent valuer provides the fair value of the property every 12 months. The fair value measurement for the property of $43 million has been categorised as Level 3 fair value based on the inputs to the valuation technique used (see Note 2.3(m)). (ii) Level 3 fair value The following table shows the valuation technique used in measuring the fair value of property, as well as the significant unobservable inputs used. Valuation technique Significant unobservable inputs Inter-relationship between key unobservable inputs and fair value measurement Capitalisation Approach: The valuation model considers yields indicated by sales by similar property investments to reflect any expectations of future growth in income and capital value. Adjustments are then made for any relevant rental reversion including letting up allowances for vacant space, incentives, leasing fees, capital expenditure and other appropriate capital allowances Current market rental per square metre. Vacancy periods (average 12 months after the end of each lease) Rent-free periods (1 year period on new leases). Capitalisation rate of 9.5% based on recent sales of comparable properties. The estimated fair value would increase (decrease) if: Expected market rental growth were higher (lower); Vacancy periods were shorter (longer); The occupancy rate were higher (lower); Rent-free periods were shorter (longer); or The capitalisation rate were lower (higher).

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