MKH Annual Report 2017

42. FAIR VALUE HIERARCHY (continued) The land and building under property, plant and equipment were revalued by directors in September 2015 and September 2010 based on independent professional valuation. The fair value of these assets are within level 3 of the fair value hierarchy using significant unobservable inputs. There is no fair value determined for the current financial year as the Group revalues its land and building every five years or at a shorter intervals whenever fair value of the said assets is expected to differ substantially from the carrying amounts. Fair value reconciliation of investment properties measured at level 3 are as follows: The Group Commercial Office and Education 2017 properties shoplot centre Total RM RM RM RM Investment properties At beginning of year 244,300,000 19,157,000 45,000,000 308,457,000 Transfer from inventories - 7,492,099 - 7,492,099 Changes in fair values - 2,987,901 - 2,987,901 At end of year 244,300,000 29,637,000 45,000,000 318,937,000 2016 At beginning and end of year 244,300,000 19,157,000 45,000,000 308,457,000 Description of valuation techniques used and key unobservable inputs to valuation on investment properties measured at level 3 are as follows: Property category Valuation technique Significant unobservable inputs Range Investment properties Commercial properties Comparison method Market value per square feet RM50 - RM758 Commercial properties Investment method Estimated average rental rate RM3.47 - RM12.89 per square feet per month Estimated outgoings per square RM1.48 - RM1.54 feet per month Term yield 6.85% - 7.25% Sinking fund 3% Void rate 2.00% - 5.00% Commercial properties Cost method Construction price per square feet RM120 Notes to the Financial Statements For the Financial Year ended 30 September 2017 201 MKH Berhad • Annual Report 2017