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The land owned by Precious Woods was valued at cost in the past. To better reflect its economic value, Precious Woods decided in 2019 to apply the revaluation model according to IAS 16 Property, Plant and Equipment for all its land assets. Independent valuators performed a revaluation of the land in Brazil and Gabon according to the revaluation model of IAS 16.31. The fair value of the land in Brazil was measured as of 31 December 2019. In Gabon, the valuation used, was performed in 2019 in relation with a possibility for the acquisition of a directly bordering lot of land. The carrying amount, that would have been recognized for those assets by using the cost model, would have been EUR 13.7 million.
Land revaluation Brazil and Gabon
The revaluations were performed by BDO Brazil for the land assets in Brazil and by A.N. Dengue for the land assets in Gabon. These valuators are not connected to the Group and have recent experience in location and category of the land being valued. The valuation was based on the market value. The sales comparison approach is used to determine market value. This approach consists of comparing the subject land to similar land that were sold in the recent past in an open market situation, and making appropriate adjustments to the value for market trends. This results in a market value for the land.
The fair value measurement for the land has been categorized as a level 2 fair value based on the inputs to the valuation technique used.
Reconciliation of carrying amount of level 2 land revaluation
|in thousand EUR||2019
at Fair Value
|At 1 January||14 204||14 790|
|Revaluation adjustment||42 669||–|
|Reclassifications advanced payments for PPE||–||4|
|At 31 December||56 331||14 204|
Land is part of the total PPE, as presented in Note 10.
The land value is measured at fair value with any changes in value recognized in Other Comprehensive Income under Revaluation surplus.