224 Annual Report 2022 Notes to the Financial Statements For the Financial Year Ended 30 September 2022 FAIR VALUE HIERARCHY (CONT’D) 46. Cost method of valuation In the cost method of valuation, the market value of the subject property is the sum of the market value of the land and building. The value of the building is assumed to have a direct relationship with its cost of construction. The cost of construction is then adjusted to allow for cost of finance, profit and demand to reflect its profitable present market value. Valuation processes applied by the Group The fair value of land and buildings under property, plant and equipment in 2020 was determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued. The Group revalues its land and buildings every five years or at shorter intervals whenever the fair value of the said assets is expected to differ substantially from the carrying amounts. The fair value of investment properties is determined by external, independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of property being valued. The independent professional valuer provides the fair value of the Group’s investment property annually. Fair value reconciliation of biological assets measured at level 3 are as follows: 2022 RM 2021 RM The Group Biological assets At end of year At beginning of year 4,233,267 6,177,026 Changes in fair value 1,637,252 (577,142) Effect of movements in exchange rate 306,507 317,476 6,177,026 5,917,360 Policy on transfer between levels The fair value of an asset to be transferred between levels is determined as of the date of the event or change in circumstances that caused the transfer. Transfer between Level 1 and 2 fair values There is no transfer between Level 1 and 2 fair values during the financial year.
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