The following tables provide an analysis of assets and liabilities that are measured at fair value. The different levels of the fair value hierarchy are defined below.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Note 5A: Fair value measurements
| Fair value measurements at the end of the reporting period using | ||||
|---|---|---|---|---|
| Fair value $'000 |
Level 1 inputs $'000 |
Level 2 inputs $'000 |
Level 3 inputs $'000 |
|
| Non-financial assets: | ||||
| Office Equipment | 928 | - | - | 928 |
| Motor Vehicles | 33 | - | 33 | - |
| Furniture | 655 | - | - | 655 |
| Personal Computers | 77 | - | - | 77 |
| Other IT Equipment | 7,053 | - | - | 7,053 |
| Land and buildings | 5,721 | - | - | 5,721 |
| Artworks and Heritage | 104 | - | 104 | - |
| Library | 1,871 | - | - | 1,871 |
| Total non-financial assets | 16,442 | - | 137 | 16,305 |
| Total fair value measurements of assets in the statement of financial position |
||||
| 16,442 |
- |
137 |
16,305 |
|
Fair value measurements - highest and best use of all non-financial assets are the same as their current use.
Note 5B: Level 1 and Level 2 transfers for recurring fair value measurements
No assets were transferred between Level 1 and Level 2.
Note 5C: Valuation technique and inputs for Level 2 and Level 3 fair value measurements
| Category (Level 2 or Level 3) |
Fair value $'000 | Valuation technique(s)1 |
Inputs used | Range (weighted average)2 |
|
|---|---|---|---|---|---|
| Non-financial assets | |||||
| Motor Vehicles | Level 2 | 33 | Cost Approach | Sales of similar vehicles. | N/A |
| Artworks and Heritage | Level 2 | 104 | Cost Approach | Sales of similar art work. | N/A |
| Office Equipment | Level 3 | 928 | Cost Approach | Estimated replacement cost of similar assets adjusted for remaining useful life. | $0 - $196,589 ($3,296) |
| Furniture | Level 3 | 655 | Cost Approach | Estimated replacement cost of similar assets | $0 - $232,144 |
| adjusted for remaining useful life. | ($11,549) | ||||
| Personal Computers | Level 3 | 77 | Cost Approach | Estimated replacement cost of similar assets adjusted for remaining useful life. | $0 - $2,595 ($149) |
| Other IT Equipment | Level 3 | 7,053 | Cost Approach | Estimated replacement cost of similar assets | $0 - $3,056,442 |
| adjusted for remaining useful life. | ($12,085) | ||||
| Land and buildings | Level 3 | 5,721 | Cost Approach | Estimated replacement cost of similar assets | $93 - $610,795 |
| adjusted for remaining useful life. | ($66,901) | ||||
| Library | Level 3 | 1,871 | Cost Approach | Estimated replacement cost of similar assets | $1,871,241 |
| adjusted for remaining useful life. | ($1,872,241) | ||||
1. No change in valuation technique occurred during the period.
2. Significant unobservable inputs only. Not applicable for assets or liabilities in the Level 2 category.
Recurring Level 3 fair value measurement - valuation processes
The Treasury procured valuation services from Preston Rowe Patterson Valuers (PRP). PRP provided a written assurance that the valuation model is in compliance with AASB 13. PRP valuations are based on the most recent comprehensive valuation of the Treasury's fixed assets. PRP has used the cost approach which reflects the amount that would be required currently to replace the service capacity of the Treasury's fixed assets. PRP has updated the depreciated replacement cost analysis relative to current replacement cost for each asset and the expended useful life to establish an appropriate estimate of fair value as at 30 June 2014.
Recurring Level 3 fair value measurement - sensitivity of inputs
The fair value estimates provided at a reporting date based on level 3 inputs are sensitive to movements in replacement cost as at the reporting date, either up or down. Adopted useful life, expended useful and remaining useful life are considered to be generally stable inputs and would not be subject to sensitivity unless the Treasury revised its policy with respect to the useful life of a particular asset class.
Note 5D: Reconciliation for recurring Level 3 fair value measurements Recurring Level 3 fair value measurements - reconciliation for assets
| Non-financial assets | |||||||
|---|---|---|---|---|---|---|---|
| Office Equipment 2014 $'000 |
Furniture 2014 $'000 |
Land and Buildings 2014 $'000 |
Library 2014 $'000 |
Personal Computers 2014 $'000 |
Other IT Equipment 2014 $'000 |
Total 2014 $'000 |
|
| Opening balance | 998 | 1,146 | 504 | 7,237 | 6,815 | 1,871 | 18,571 |
| Total gains/(losses) recognised in net cost of services' | (316) | (420) | (432) | (1,679) | (4,288) | - | (7,135) |
| Purchases | 263 | 148 | 326 | 1,489 | 2,975 | - | 5,201 |
| Settlements | (17) | (219) | (321) | 6 | 219 | - | (332) |
| Closing balance | 928 | 655 | 77 | 7,053 | 5,721 | 1,871 | 16,305 |
| Changes in unrealised gains/(losses) recognised in net cost of services | - | - | - | - | - | - | - |
1. These gains/(losses) are presented in the Statement of Comprehensive Income under depreciation and amortisation