kAThMANdu  annual report 2012 39 (i) Fair value hedge (ii) Cash flow hedge (P) PROPERTY, PLANT ANd EQuIPMENT (iii) derivatives that do not qualify for  hedge accounting (O) FAIR VALuE ESTIMATION Changes in the fair value of derivatives that are designated  and qualify as fair value hedges are recorded in the income  statement, together with any changes in the fair value of the  hedged asset or liability that are attributable to the hedged risk. If the hedge no longer meets the criteria for hedge accounting,  the adjustment to the carrying amount of a hedged item for  which the effective interest method is used is amortised to  profit and loss over the period of maturity. the effective portion of changes in the fair value of derivatives  that are designated and qualify as cash flow hedges is  recognised in equity in the hedging reserve. the gain or loss  relating to the ineffective portion is recognised immediately  in the income statement. amounts accumulated in equity are  recycled in the income statement in the periods when the  hedged item will affect profit or loss (for instance when the  forecast sale that is hedged takes place). however, when the  forecast transaction that is hedged results in the recognition of  a non-financial asset (for example, inventory) or a non-financial  liability, the gains and losses previously deferred in equity are  transferred from equity and included in the measurement of  the initial cost or carrying amount of the asset or liability. When a hedging instrument expires or is sold or terminated,  or when a hedge no longer meets the criteria for hedge  accounting, any cumulative gain or loss existing in equity  at that time remains in equity and is recognised when the  forecast transaction is ultimately recognised in the income  statement. When a forecast transaction is no longer expected  to occur, the cumulative gain or loss that was reported in  equity is immediately transferred to the income statement.  Certain derivative instruments do not qualify for hedge  accounting or hedge accounting has not been adopted.  Changes in the fair value of these derivative instruments  are recognised immediately in the income statement within  ‘finance costs – net’. the fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for  disclosure purposes. the fair value of financial instruments that are not traded in  an active market (for example, over-the-counter derivatives)  is determined using valuation techniques. the fair value of  forward exchange contracts is determined using forward  exchange market rates at the balance sheet date. Quoted market prices or dealer quotes for similar instruments  are used for long-term debt. other techniques, such as  estimated discounted cash flows, are used to determine fair  value for the remaining financial instruments. the fair value of  interest rate swaps is calculated as the present value of the  estimated future cash flows. the fair value of forward foreign  exchange contracts is determined using quoted forward  exchange rates at the balance sheet date. the carrying value less impairment provision of trade  receivables and payables are assumed to approximate their fair values. the only financial instruments held by the Group that are  measured at fair value are over the counter derivatives. these  derivatives have all been determined to be within level 2 (for  the purposes of nZ IFrS 7) of the fair value hierarchy as all  significant inputs required to ascertain the fair value of these  derivatives are observable. all property, plant and equipment are stated at historical cost  less depreciation and impairment. historical cost includes  expenditure that is directly attributable to the acquisition of  the items. Cost may also include transfers from equity of  any gains/losses on qualifying cash flow hedges of foreign  currency purchases of property, plant and equipment. Subsequent costs are included in the asset’s carrying amount  or recognised as a separate asset, as appropriate, only when  it is probable that future economic benefits associated with  the item will flow to the Group and the cost of the item can  be measured reliably. all other repairs and maintenance are  charged to the income statement during the financial period in  which they are incurred. depreciation of property, plant and equipment is calculated  using diminishing value method so as to expense the cost of  the assets over their useful lives. the rates are as follows: the assets’ residual value and useful lives are reviewed and  adjusted if appropriate at each balance sheet date. Capital work in progress is not depreciated until available for use. an asset’s carrying amount is written down immediately to its  recoverable amount if the asset’s carrying amount is greater  than its estimated recoverable amount. Leasehold Improvements 10 – 50 % Office, Plant and Equipment 10 – 48 % Furniture and Fittings 10 – 48 % Computer Equipment 20 – 60% Motor Vehicles 15 – 30%