NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 3. Significant accounting judgements and estimates (cont’d) 3.2 Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (a) Fair value of investment properties The Group and the Fund carry their investment properties at fair value, with changes in fair values being recognised in profit or loss. The Group and the Fund had engaged independent professional valuers to determine the fair value and there are no material events that affect the valuation between the valuation date and financial year end. The determined fair value of the investment properties by the independent professional valuers is most sensitive to the yield rate and discount rate. The range of the yield rate and the discount rate used in the valuation is disclosed in Note 10. The following table demonstrates the sensitivity of the fair value measurement to changes in estimated term yield rate, discount rate and its corresponding sensitivity result in a higher or lower fair value measurement: Fair value Fair value Increase/(decrease) Increase/(decrease) Group Fund 2021 2020 2021 2020 RM RM RM RM Yield rate - 0.25% 26,152,200 52,165,915 22,670,000 48,610,000 + 0.25% (382,379,400) (48,506,705) (35,200,000) (45,260,000) Discount rate - 0.25% 21,812,200 12,655,915 18,330,000 9,100,000 + 0.25% (31,909,400) (11,656,705) (28,730,000) (8,410,000) (b) Contingent liabilities Provisions are recognised when the Group and the Fund have a present obligation as a result of a past event, and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations, and a reliable estimate can be made. The Group applied judgements in reviewing the provision at each reporting date and adjusted to reflect the current best estimate of the probable outflow of economic resources will be required to settle the obligation. The details are further disclosed in Note 27. AL-`AQAR HEALTHCARE REIT ANNUAL REPORT 20201 166
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