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Telfer Young (Waikato) Limited and Curnow Tizard were contracted as independent valuers to value farm and owner occupied
properties. Fair value has been assessed as the amount for which an asset could be exchanged or a liability settled between
knowledgeable willing parties in an arm’s length transaction.
The significant methods and assumptions applied in estimating the fair value were:
• the direct comparison approach (based on analysis of sales of vacant property. This analysis includes determination of land
value, other improvements and residual value for principal improvements);
• the traditional capitalisation approach (focusing on the net maintainable revenue and the level of investment return);
• the discounted cash flow approach (based on establishing a cash flow budget for the property having particular regard to
the length of lease term and nature of the leasehold interest and the following factors; discount rate, land inflation and
rental rates); and
• comparing market evidence of transaction prices for similar properties.
The total value of farm properties valued by Telfer Young (Waikato) Limited at 31 March 2016 is $27.9m (2015: $25.4m). The
carrying amount that would have been reported for farm properties under the historical cost method is $11.3m (2015: $9.3m).
The total value of owner occupied properties valued by Curnow Tizard Limited at 31 March 2016 is $5.3m (2015: $6.6m). The
carrying amount that would have been reported for other properties under the historical cost method is $4.5m (2015: $4.5m).
All valuers are independent registered valuers not related to the Trust. All valuers hold recognised and relevant professional
qualifications and have recent experience in the locations and categories of farm owner occupied properties they have valued.
Tribal properties
Tribal properties comprise of land and buildings located at Hopuhopu, reserve lands and a residential property located at
Pukawa.
Land and buildings (Hotels) pledged as security
Westpac New Zealand and the Bank of New Zealand have security agreements over the assets owned by the Novotel Auckland
Airport hotel and the Hamilton Riverview Hotel Limited respectively, refer to note 19.
Recognition and measurement
Farm and owner occupied properties are comprised of land, buildings and plant held on the farms as well as buildings occupied
by the Waikato Raupatu Lands Trust and Tainui Group Holdings Limited, and are shown at fair value, based on periodic, but at
least triennial, valuations by external independent valuers, less subsequent depreciation. Any accumulated depreciation at the
date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued
amount of the asset.
Land and buildings (hotels), tribal properties, vehicles, equipment, fixtures and fittings are stated at historical cost less
depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Tribal properties comprise of buildings located at Hopuhopu, reserve lands and a residential property in Pukawa.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Trust and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the statement of comprehensive revenue and expense during the
financial period in which they are incurred.
Increases in the carrying amounts arising on revaluation of farm and owner occupied properties are credited to the revaluation
reserve in equity. To the extent that the increase reverses a revaluation decrease previously recognised in the statement of
comprehensive revenue and expense, the increase is first recognised in statement of comprehensive revenue and expense.
Decreases that reverse previous increases are first charged against revaluation reserves directly in equity to the extent of the
remaining reserve attributable to the same class of asset; all other decreases are charged to the statement of comprehensive
revenue and expense.