2019 Integrated Report

PPS INTEGRATED REPORT 2019 | 123 OWNER-OCCUPIED PROPERTY The land and buildings revaluation gain represents the capital appreciation on the owner-occupied properties. As the properties are held to back insurance policy liabilities, with discretionary participation features, the movement in insurance policy liabilities as a result of the revaluation is recognised directly in equity. Deferred tax has been provided on the revaluation difference arising on owner-occupied property owned by PPS Insurance Company Limited, based on the amounts and at the rate applicable to recovery through use. Owner occupied property is carried at fair value and is classified as level 3 in terms of the IFRS 13 hierarchy. All of the Group’s owner-occupied property consisting of office blocks situated at 6 and 7 Anerley Road, Parktown, and PPS Centurion Square were valued at 31 December 2019 by Quadrant Properties (Pty) Limited . Independent valuations were performed using the discounted cash flow of future income stream method. The discounted cash flow method takes projected cash flows and discount them at a rate which is consistent with comparable market transactions. Refer to note 35.5 for valuation assumptions. The opening carrying value is depreciated and then adjusted to reflect market value at year end. If the owner-occupied properties were stated on a historical cost basis, the amounts would be as follows: Group 2019 2018 R'000 R'000 Cost 452 843 375 030 Accumulated depreciation (22 261) (12 098) Net book amount as at 31 December 430 582 362 932 LEASES Amounts recognised in the Statement of Financial Position The statement of Financial Position includes the following amounts related to leases: Group 1 January 2019 2019 R'000 R'000 Right-of-use assets Buildings 68 123 66 456 Lease Liabilities (note 20) Current 20 345 16 855 Non-current 54 282 56 157 Total lease liabilities 74 627 73 012 The Group has adopted IFRS 16 Leases retrospectively, but has not restated comparatives for the 2018 reporting period as permitted under the specific transition provisions in the standard.