14. INVESTMENT PROPERTIES (CONTD.) Description of valuation techniques Under the comparison method, a property’s fair value is estimated based on comparable transactions. This approach is based upon the principle where a potential buyer will not pay more for the property than it will cost to buy a comparable substitute property and would indicate, by the known selling price of the duplicate, the price for which the subject property could be sold. Investment properties valued using the comparison method with significant adjustments made for differences such as location, size, condition, accessibility and design (“adjustment factors”) are categorised as Level 3 in the fair value hierarchy. The significant unobservable inputs for this category of investment properties, which are the adjustment factors, range generally between -25% and 20% (2023: -25% and 20%) of the property’s comparable. Sensitivity analysis An increase in the price per square feet of comparable properties in the surrounding vicinity will result in an increase of fair value of the investment properties. Fair value measurement hierarchy for investment properties Group Date of valuation Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Land 31 December 2024 – – 14,325 Land 31 December 2023 – – 14,325 (i) Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities (ii) Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable (iii) Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable The following table show a reconciliation of Level 3 fair value: Group 2024 RM’000 2023 RM’000 Land As at 1 January 14,325 13,800 Fair value adjustment – 525 As at 31 December 14,325 14,325 Notes to the Financial Statements For the year ended 31 December 2024 317 FINANCIAL STATEMENTS
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