The following tables provide an analysis of assets and liabilities that are measured at fair value. The different levels of the fair value hierarchy are defined below.

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.

1. Fair Work Commission did not measure any non-financial assets at fair value on a non- recurring basis as at 30 June 2014.

The highest and best use of all non-financial assets are the same as their current use.

Fair value Measurement - Highest & Best Use

Fair Work Commission’s assets are held for operational purposes and not held for the purposes of deriving a profit. The current use of all controlled assets is considered their highest and best use.

Recurring fair value measurements transferred between Level 1 and Level 2 for assets and liabilities

There have been no transfers between levels of the hierarchy during the year.
        
Fair Work Commission’s policy for determining when transfers between levels are deemed to have occurred can be found in Note 1.

1. There have been no changes to valuation techniques.
2. Significant unobservable inputs only. Not applicable for assets or liabilities in the Level 2 category.
        
There were no significant inter-relationships between unobservable inputs that materially affect fair value.

Recurring and non-recurring Level 3 fair value measurements - valuation processes

Fair Work Commission procured the service of the Australian Valuation Office (AVO) to undertake a comprehensive valuation of all leasehold, plant and equipment assets and RHAS to undertake a comprehensive valuation of all artwork at 30 June 2012. Fair Work Commission tests the procedures of the valuation model as an internal management review at least once every 12 months (with a formal revaluation undertaken once every three years). If a particular asset class experiences significant and volatile changes in fair value (i.e. where indicators suggest that the value of the class has changed materially since the previous reporting period), that class is subject to specific valuation in the reporting period, where practicable, regardless of the timing of the last specific valuation.

There is no change in the valuation technique since the prior year.

Significant Level 3 inputs utilised by the entity are derived and evaluated as follows:

Leasehold Improvements, Property, Plant and Equipment  - Consumed economic benefit / Obsolescence of asset

Assets that do not transact with enough frequency or transparency to develop objective opinions of value from observable market evidence have been measured utilising the cost (Depreciated Replacement Cost or DRC) approach. Under the DRC approach the estimated cost to replace the asset is calculated and then adjusted to take into account its consumed economic benefit / asset obsolescence (accumulated Depreciation). Consumed economic benefit / asset obsolescence has been determined based on professional judgment regarding physical, economic and external obsolescence factors relevant to the asset under consideration.

The weighted average is determined by assessing the fair value measurement as a proportion of the total fair value for the class against the total useful life of each asset.

Recurring Level 3 fair value measurements - sensitivity of inputs

Leasehold Improvements & Property, Plant and Equipment - Consumed economic benefit / Obsolescence of asset

The significant unobservable inputs used in the fair value measurement of Fair Work Commission's leasehold improvements, property, plant and equipment asset classes relate to the consumed economic benefit / asset obsolescence. A significant increase (decrease) in this input would result in a significantly lower (higher) fair value measurement.

1. Open balance as determined in accordance with AASB 13

2. The presentation of these gains/(losses) in the Statement of Comprehensive Income will depend on Fair Work Commission.

3. There have been no transfers between levels of the hierarchy during the year.

4. The presentation of unrealised gains/(losses) in the Statement of Comprehensive Income will depend on Fair Work Commission.

Fair Work Commission’s policy for determining when transfers between levels are deemed to have occurred can be found in Note 1.