Toowoomba Regional Council
Notes to the Financial Statements
for the year ended 30 June 2016
Note 13. Fair Value Measurements (continued)
(3) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued)
Stormwater Drainage Assets (continued)
Accumulated Depreciation
The main Level 3 inputs used are derived and evaluated as follows:
- A condition assessment is applied, which is based on factors such as the age of the asset, overall condition as noted
by the Valuer during inspection, economic and/or functional obsolescence. The condition assessment directly
translates to the level of accumulated depreciation applied.
- In determining the level of accumulated depreciation for major assets, we have disaggregated into significant
components which exhibit different patterns of consumption (useful lives). Residual value is also factored which is the
value at the time the asset is considered to be no longer available. The condition assessment is applied on a
component basis.
- While the replacement cost of the assets could be supported by market supplied evidence (Level 2), the other
unobservable inputs (such as estimates of residual value, useful life, and asset condition) were also required (Level 3).
(4). Fair value measurements using significant unobservable inputs (Level 3)
The Valuation Process for Level 3 Fair Value Measurements
Council's valuation policies and procedures for property, plant and equipment are reviewed annually taking
into consideration an analysis of movements in fair value and other relevant information. Non-recurring fair value
measurements are made at the point of reclassification by a registered valuer.
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CHAPTER 6 Financial report
TOOWOOMBA REGIONAL COUNCIL Annual Report 2015 - 2016