114 / 132
$’000
Opening balance 1 July 2015
4,222,084
Additions
173,359
Gain included in expenses
3,015
Depreciation
(176,093)
Disposals
(7)
Changes in fair value included in other comprehensive income
(197,514)
Closing balance 30 June 2016
4,024,844
Additions
197,346
Gain included in expenses
1,018
Depreciation
(172,156)
Disposals
(695)
Change in fair value included in other comprehensive income
(141,201)
Closing balance 30 June 2017
3,909,156
(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 business unit
which is comprised of the relevant
CGUs. 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)
(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 2016 and
30 June 2017 for the Group:
112
NOTE 11
FINANCIAL RISK MANAGEMENT (CONTINUED)