MKH Annual Report 2018

201 MKH Berhad Annual Report 2018 42. FAIR VALUE HIERARCHY (Cont’d) 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 di er substantially from the carrying amounts. Fair value reconciliation of investment properties measured at level 3 are as follows: The Group Commercial O ce and Education 2018 properties shoplot centre Total RM RM RM RM Investment properties At beginning of year 244,300,000 29,637,000 45,000,000 318,937,000 Changes in fair values (800,000) 483,000 - (317,000) At end of year 243,500,000 30,120,000 45,000,000 318,620,000 2017 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 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 2018