128 MEGACHEM LIMITED Notes to The Financial Statements 31 December 2024 13. Investment property Group 2024 2023 $ $ At cost: Balance at beginning of year 120,774 127,838 Currency translation differences 6,928 (7,064) Balance at end of year 127,702 120,774 Accumulated depreciation: Balance at beginning of year 65,205 66,150 Currency translation differences 3,853 (3,733) Depreciation for the year 2,753 2,788 Balance at end of year 71,811 65,205 Carrying value: Balance at beginning of year 55,569 61,688 Balance at end of year 55,891 55,569 Fair value: Fair value at end of year 303,490 293,179 Rental and service income from investment property 14,692 14,879 Description / Location Gross floor area Tenure of land Condominium BL 20-3, 20th Floor, Mont’ Kiara Palma, Jalan 1/70C, Off Bukit Kiara, Kuala Lumpur 50480, Malaysia 1,389 square feet Freehold The useful life of the building on freehold land is 50 years. The fair value was measured based on the highest and best use method to reflect the actual market state and circumstances as of the end of the reporting year. The fair value was determined on a systematic basis at least once in five years by the independent professional valuer. Management determined that the highest and best use of the asset is the current use and that it would provide maximum value to market participants principally through its use in combination with other assets. For fair value measurements categorised within the fair value hierarchy below, a description of the valuation techniques and the significant other observable inputs used in the fair value measurement are as follows: Asset: Freehold property at BL 20-3, 20th Floor, Mont’ Kiara Palma, Jalan 1/70C, Off Bukit Kiara, Kuala Lumpur 50480, Malaysia Fair value and fair value hierarchy – Level: $303,490 (2023: $293,179); and Level 2 (2023: Level 2). Valuation technique for recurring fair value measurements: Comparison with market evidence of recent transaction prices for similar properties. Significant observable inputs and range (weighted average): Price per square feet $218 – $221 (2023: $207 – $213) Sensitivity on management’s estimates – 10% variation from estimate Impact – lower by $30,349; higher by $30,349 The investment property was leased out for the reporting years ended 31 December 2024 and 31 December 2023. The direct operating expenses (including repairs and maintenance) arising from the investment property that generated rental income during the year are not material.
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