Further information on estimates used in the revaluation method for property, plant and equipment is provided in Note 11.  The fair value of standing timber and agricultural assets is based on the following critical estimates and assumptions: the timing  of forecasted revenues and prices; estimated selling costs; sustainable felling plans; growth assumptions; silviculture costs;  discount rates; terminal capitalization rates; and terminal valuation dates.  Further information on estimates used for sustainable resources is provided in Note 12. Estimates and assumptions used in determining the fair value of financial instruments are: equity and commodity prices; future  interest rates; the credit worthiness of the company relative to its counterparties; the credit risk of the company’s counterparties;  estimated future cash flows; discount rates and volatility utilized in option valuations.  Further information on estimates used in determining the carrying value of financial instruments is provided in Notes 6,  26 and 27. The company estimates the net realizable value of its inventory using estimates and assumptions about future selling prices and  future development costs. Other estimates and assumptions utilized in the preparation of the company’s financial statements are: the assessment or  determination of net recoverable amounts; depreciation and amortization rates and useful lives; estimation of recoverable  amounts of cash-generating units for impairment assessments of goodwill and intangible assets; ability to utilize tax losses and  other tax measurements; and fair value of assets held as collateral.  Management is required to make critical judgments when applying its accounting policies. The following judgments have the  most significant effect on the consolidated financial statements: When determining the appropriate basis of accounting for the company’s investees, the company makes judgments about the  degree of influence that the company exerts directly or through an arrangement over the investees’ relevant activities. This may  include the ability to elect investee directors or appoint management. Control is obtained when the company has the power  to direct the relevant investing, financing and operating decisions of an entity and does so in its capacity as principal of the  operations, rather than as an agent for other investors. Operating as a principal includes having sufficient capital at risk in any  investee and exposure to the variability of the returns generated by the decisions of the company as principal. Judgment is used  in determining the sufficiency of the capital at risk or variability of returns. In making these judgments, the company considers  the ability of other investors to remove the company as a manager or general partner in a controlled partnership. When applying the company’s accounting policy for investment properties, judgment is applied in determining whether certain  costs are additions to the carrying amount of the property and, for properties under development, identifying the point at which  practical completion of the property occurs and identifying the directly attributable borrowing costs to be included in the carrying  value of the development property.  The company’s accounting policy for its property, plant and equipment requires critical judgments over the assessment of  carrying value, whether certain costs are additions to the carrying amount of the property, plant and equipment as opposed  to repairs and maintenance, and for assets under development the identification of when the asset is capable of being used as  intended and identifying the directly attributable borrowing costs to be included in the assets’ carrying value.  For assets that are measured using the revaluation method, judgment is required when estimating future prices, volumes and  discount and capitalization rates. Judgment is applied when determining future electricity prices considering market data for  years that a liquid market is available and estimates of electricity prices from renewable sources that would allow new entrants  into the market in subsequent years. The purchase and sale of businesses or subsidiaries between entities under common control fall outside the scope of IFRS and  accordingly, management uses judgment when determining a policy to account for such transactions taking into consideration  other guidance in the IFRS framework and pronouncements of other standard-setting bodies. The company’s policy is to record  assets and liabilities recognized as a result of transfers of businesses or subsidiaries between entities under common control at  carrying value. Differences between the carrying amount of the consideration given or received and the carrying amount of the  assets and liabilities transferred are recorded directly in equity.  96 BROOKFIELD ASSET MANAGEMENT  c.  Sustainable Resources d.  Financial Instruments e.  Inventory f.  Other ii.  Critical Judgments a.  Control or Level of Influence b.  Investment Properties c.  Property, Plant and Equipment d.  Common Control Transactions 