Investr Educatin Change f Investment Prperties Valuatin Methd
Decisin t change the valuatin methd f the Investment Prperties In the third quarter f fiscal 2017, the Grup s Bard f Directrs decided t change the accunting plicy fr investment prperty frm the cst mdel t the fair value mdel, accrding t IFRS rules. The Grup has therefre retractively changed the previusly issued cnslidated financial statements fr the last 3 years. When will this change be reflected? Since ur next Financial Statements as f March 31, 2017 2
Why we decided t change the valuatin methd? The Grup believes that this change is justifiable because it better reflects the reasnable value f its cre assets and therefre prvides mre relevant infrmatin t management and users f ur financial statements. Current Bk Value f Investment Prperties (at histrical cst) (USD MM) Office buildings 126 Shpping Centers 103 Land Reserves 12 3
Assets clasified as Investment Prperties Investment prperties are thse prperties wned by the Grup that are held either t earn lng-term rental incme r fr capital appreciatin and that are nt ccupied by the Grup fr its wn peratins. Investment prperties frm assciates and jint ventures fllw the same accunting plicy in the cnslidated financial statements. Investment prperty als includes prperties that are being cnstructed r develped fr future use as investment prperty. The Grup als classifies land whse future use has nt been determined yet as investment prperty. Shppings Malls Offices* Land Reserves * Includes La Rural S.A. 4
Valuatin made by 3rd qualified independant party The Grup s investment prperties were valued at each reprting date by an independent prfessinally appraiser: NEWMARK GRUBB BACRE Valuatin techniques used fr the estimatin f fair value f the investment prperty Fr all shpping malls, the valuatin will be determined using discunted cash flw ( DCF ) prjectins Fr ffice prperties and undevelped land, the valuatin will be determined using market cmparable. These values are adjusted fr differences in key attributes such as lcatin, size f the prperty and quality f the interir design. The mst significant cntributin t this cmparable market apprach is the price per square meter. Fr prperties under cnstructin, the valuatin will be based n a cst basis fr all perids indicated. These prperties under develpment cmprise wrks in a building ffice t be cnstructed. 5
Main impacts in Equity The impact f fair value measurement f Investment Prperties since the change f accunting rule frm Argentine GAAP t IFRS (2011) was recgnized in a special reserve nt subjet fr distributin. Subsequent changes (frm 2012 t 2016) in the fair value measurement f Investment Prperties is recgnized in accumulated retained earnings. Changes in the fair value measurement f Investment Prperties f the current fiscal year 2017 is recgnized in the P&L and accumulated retained earnings. Until 2011 Special Reserve Frm 2012 t 2016 Accumulated retained earnings Fiscal year 2017 P&L and accumulated retained earnings 6
Main impacts in the next Financial Statement (as f March 31, 2017) Psitive impact n the Incme Statement under the new line Change f fair value f Investment prperties Psitive impact in Equity Eliminatin f D&A f Investment Prperties Eliminatin f Gain frm sales f Investment Prperties N Tax impact (just accunting registratin f a differed incme tax) Accrding t IFRS rules, there s n chance t return back t Cst Methd 7
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