NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONT 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Property, plant and equipment (i) Recognition and measurement Following initial recognition at cost, land and buildings are carried at a revalued amount, which is the fair value at the date of the revaluation less  any subsequent accumulated depreciation on buildings and accumulated impairment losses� Fair value is determined by reference to market-based evidence, which is the amount for which the assets could be exchanged between a  knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as at the valuation date� Any revaluation increment is credited to the asset revaluation reserve included in the equity section of the statement of financial position, unless it  reverses a revaluation decrement of the same asset previously recognised in the statement of comprehensive income� Any revaluation decrement  is recognised in the income statement unless it directly offsets a previous increment of the same asset in the asset revaluation reserve� In addition,  any accumulated depreciation as at revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated  to the revalued amount of the asset� Upon disposal of land and buildings, any revaluation reserve relating to the particular asset being sold is  transferred to the capital profits reserve� For the 31 December 2011 and prior financial years, land and buildings were valued by external independent valuers on a rotational, but at  least triennial basis, to ensure that the carrying amount did not differ materially from the respective asset’s fair value at each reporting date�  Commencing with the 31 December 2012 financial year, the Directors decided that all land and buildings will be valued on an annual basis by  independent valuers�  All initial lump sum payments in respect of pastoral and perpetual property leases have been classified as land� The remaining lease payments are  nominal and are therefore expensed to the income statement as incurred� Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses� Such cost includes the  cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts is incurred� Similarly, when each major inspection is  performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement only if it is eligible for capitalisation� Directly  attributable costs for the acquisition and construction of an asset are capitalised if the relevant recognition criteria are met� All other repairs and  maintenance are recognised in the income statement as incurred� We review and adjust, if appropriate, the residual values, useful lives and amortisation methods of all property, plant and equipment at the end of  each financial year� (ii) Depreciation Depreciation is calculated on a straight line basis over the estimated useful life of the asset as follows: We review the carrying values of plant and equipment for impairment when events or changes in circumstances indicate the carrying value may not  be recoverable� For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which  the asset belongs� If any indication of impairment exists and where the carrying values exceed the estimated recoverable amount, the assets or  cash-generating units are written down to their recoverable amount� The recoverable amount of plant and equipment is the greater of fair value less costs to sell and value in use� In assessing value in use, the  estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the  time value of money and the risks specific to the asset or cash generating unit�  Annual Report 2013 61 (iii) Impairment Property, plant and equipment Average useful life Land (freehold, pastoral & perpetual property leases) Not depreciated Buildings 40 years Fixed improvements 30 years Owned plant and equipment 3-10 years Plant and equipment under lease 2-5 years Motorised equipment 5 years