NOTE 12
FINANCIAL RISK MANAGEMENT (CONTINUED)
$’000
Opening balance 1 July 2012
3,098,048
Loss included in expenses
(481,990)
Additions
1,422,887
Depreciation
(152,873)
Disposals
(634)
Change in fair value included in other comprehensive income
160,797
Closing balance 30 June 2013
4,046,235
Loss included in expenses
2,060
Additions
274,136
Depreciation
(165,714)
Disposals
(364)
Change in fair value included in other comprehensive income
(29,099)
Closing balance 30 June 2014
4,127,254
(iii) Fair value measurements using significant unobservable inputs (level 3)
The following table presents the changes in level 3 items for the periods ended 30 June 2014 and 30 June 2013 for the
consolidated entity:
(iv) Valuation inputs and relationships to fair value
The following table summarises the information about the significant unobservable inputs used in level 3 fair value
infrastructure asset measurements. See (ii) above for the valuation techniques adopted.
Valuation technique
Significant unobservable inputs
Inter-relationship between
significant unobservable inputs
and fair value measurements
Discounted cash flows: The valuation
model considers the present value of
expected payment, discounted using
a risk-adjusted discount rate. The
expected payment is determined by
considering the cashflow forecasts
for each corridor. Risk adjustments
are made and terminal value
calculations are completed on a
probability basis.
• Forecast annual revenue,
• Maintenance and capital
expenditure,
• Risk-adjusted discount rate.
The estimated fair value would
increase (decrease) if; the annual
revenue growth rate were higher
(lower), if Maintenance and capital
expenditure were lower (higher); or
the risk adjusted discount rate were
lower (higher). Generally a change
in the annual revenue growth rate
is accompanied by a directionally
similar change in Maintenance and
capital expenditure.
(d) Fair value measurements (continued)
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