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Notes to the Consolidated Financial Statements
(Thousands of US dollars)
52
Dar Al-Maal Al-Islami Trust
Annual Report 2014
14. Fair values of land
and buildings
An independent valuation of the Group’s land and buildings recognised as
investment property in the consolidated statement of financial position was
performed by valuers to determine the fair value of the land and buildings as
at 31 December 2014 and 2013. The revaluation surplus net of applicable
deferred income taxes was debited or credited to the consolidated statement of
income for assets recorded as investment property or assets designated at fair
value through profit or loss at inception. Investment securities available-for-sale
were debited or credited to other comprehensive income and were shown in
other reserves in shareholders’ equity. The following table analyses the non-
financial assets carried at fair value, by valuation method. The different levels
have been defined as follows:
(a) Land and buildings in Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(b) Land and buildings in Level 2
Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability either directly (that is, as prices) or indirectly (that is,
derived from prices).
(c) Land and buildings in Level 3
Inputs for the asset or liability that are not based on observable market data
(that is, unobservable inputs).
Recurring fair value measurements
At 31 December 2014
Significant unobservable
Total
input (Level 3)
Land
338,233
338,233
Office buildings
54,583
54,583
Other
11,950
11,950
404,766
404,766
At 31 December 2013
Land
265,920
265,920
Office buildings
52,239
52,239
Other
16,754
16,754
334,913
334,913
There are no Level 1 or Level 2 assets nor transfers between Levels 1 and 2
during 2014 or 2013.
Other land and buildings comprise several smaller properties located in South
Asia and the Middle East and individually would not have material impact on
the Group accounts.
Valuation techniques used to derive Level 2 fair values
Level 2 fair values of land and retail units have been derived using the sales
comparison approach. Sales prices of comparable land and buildings in close
proximity are adjusted for differences in key attributes such as property size.
The most significant input into this valuation approach is price per square foot.