on translation are accumulated as a component of equity. On the disposal of a foreign operation, or the loss of control, joint  control or significant influence, the component of accumulated other comprehensive income relating to that foreign operation  is reclassified to net income. Gains or losses on foreign currency denominated balances and transactions that are designated as  hedges of net investments in these operations are reported in the same manner.  Foreign currency denominated monetary assets and liabilities of the company and its subsidiaries are translated using the rate of  exchange prevailing at the reporting date and non-monetary assets and liabilities measured at fair value are translated at the rate  of exchange prevailing at the date when the fair value was determined. Revenues and expenses are measured at average rates  during the period. Gains or losses on translation of these items are included in net income. Gains or losses on transactions which  hedge these items are also included in net income. Foreign currency denominated non-monetary assets and liabilities, measured  at historic cost, are translated at the rate of exchange at the transaction date. Cash and cash equivalents include cash on hand, demand deposits and highly liquid short-term investments with original  maturities of three months or less. In the normal course of operations, the company enters into various transactions on market terms with related parties, which have  been measured at their exchange value and are recognized in the consolidated financial statements. Related party transactions are  further described in Note 30. The company’s subsidiaries with significant non-controlling interests are described in Note 4 and  its associates and joint ventures are described in Note 9.  The company uses the fair value method to account for real estate classified as an investment property. A property is determined  to be an investment property when it is principally held to earn either rental income or capital appreciation, or both. Investment  properties also include properties that are under development or redevelopment for future use as investment property.  Investment property is initially measured at cost including transaction costs. Subsequent to initial recognition, investment  properties are carried at fair value. Gains or losses arising from changes in fair value are included in net income during the  period in which they arise. Fair values are primarily determined by discounting the expected future cash flows of each property,  generally over a term of 10 years, using discount and terminal capitalization rates reflective of the characteristics, location and  market of each property. The future cash flows of each property are based upon, among other things, rental income from current  leases and assumptions about rental income from future leases reflecting current conditions, less future cash outflows relating  to such current and future leases. The company determines fair value using internal valuations. The company uses external  valuations to assist in determining fair value, but external valuations are not necessarily indicative of fair value. The company uses the revaluation method of accounting for certain classes of property, plant and equipment as well as certain  assets which are under development for future use as property, plant and equipment. Property, plant and equipment measured  using the revaluation method is initially measured at cost and subsequently carried at its revalued amount, being the fair value at  the date of the revaluation less any subsequent accumulated depreciation and any accumulated impairment losses. Revaluations  are performed on an annual basis. Where the carrying amount of an asset increases as a result of a revaluation, the increase  is recognized in other comprehensive income and accumulated in equity in revaluation surplus, unless the increase reverses  a previously recognized impairment recorded through net income, in which case that portion of the increase is recognized in  net income. Where the carrying amount of an asset decreases, the decrease is recognized in other comprehensive income to  the extent of any balance existing in revaluation surplus in respect of the asset, with the remainder of the decrease recognized  in net income. Depreciation of an asset commences when it is available for use. On loss of control or partial disposition of an  asset measured using the revaluation method, all accumulated revaluation surplus or the portion disposed of, respectively, is  transferred into retained earnings or ownership changes, respectively. Renewable energy generating assets, including assets under development, are classified as property, plant and equipment and are  accounted for using the revaluation method. The company determines the fair value of its renewable energy generating assets  using a discounted cash flow model, which include estimates of forecasted revenue, operating costs, maintenance and other  capital expenditures. Discount rates are selected for each facility giving consideration to the expected proportion of contracted to  un-contracted revenue and markets into which power is sold. Generally, the first 20 years of cash flow are discounted with a residual value based on the terminal value cash flows. The fair  value and estimated remaining service lives are reassessed on an annual basis. The company determines fair value using internal  valuations. The company uses external appraisers to review fair values of our renewable energy generating assets, but external  valuations are not necessarily indicative of fair value. iii.  Renewable Energy Generation ii.  Revaluation Method for Property, Plant and Equipment g)  Operating Assets i.  Investment Properties f)  Related Party Transactions e)  Cash and Cash Equivalents 2013 ANNUAL REPORT 89