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PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended
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Dec. 31, 2021
Property, plant and equipment [abstract] |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT
US$ MILLIONS | Gross carrying amount |  | Accumulated depreciation |  | Accumulated fair value adjustments |  | Total
Balance at January 1, 2020 | $ | 3,696 |  |  | $ | (567) |  |  | $ | 1,368 |  |  | $ | 4,497 |
Additions, net of disposals | 358 |  |  | 6 |  |  | — |  |  | 364 |
Non-cash additions | 6 |  |  | (3) |  |  | — |  |  | 3 |
Depreciation expense | — |  |  | (131) |  |  | — |  |  | (131) |
Fair value adjustments | — |  |  | — |  |  | 215 |  |  | 215 |
Net foreign currency exchange differences | 137 |  |  | (24) |  |  | 50 |  |  | 163 |
Balance at December 31, 2020 | $ | 4,197 |  |  | $ | (719) |  |  | $ | 1,633 |  |  | $ | 5,111 |
Additions, net of disposals | 367 |  |  | 10 |  |  | — |  |  | 377 |
Assets held by subsidiaries disposed during the period(1) | (599) |  |  | 163 |  |  | (217) |  |  | (653) |
Non-cash disposals | (1) |  |  | (3) |  |  | — |  |  | (4) |
Depreciation expense | — |  |  | (128) |  |  | — |  |  | (128) |
Fair value adjustments | — |  |  | — |  |  | 134 |  |  | 134 |
Net foreign currency exchange differences | (29) |  |  | 4 |  |  | (9) |  |  | (34) |
Balance at December 31, 2021 | $ | 3,935 |  |  | $ | (673) |  |  | $ | 1,541 |  |  | $ | 4,803 |
(1)See Note 4, Disposition of Businesses, for additional information. Property, plant and equipment of our company is predominantly comprised of last mile utility connections at our U.K. regulated distribution operation which provides essential services and generate regulated cash flows. Tariffs are set on the basis of a regulated asset base, provides inflation protection, and are typically adjusted annually. Our U.K. operation has a diverse customer base throughout England, Scotland, and Wales, which underpins its cash flows. Our company’s property, plant, and equipment is measured at fair value on a recurring basis with an effective date of revaluation for all asset classes of December 31, 2021 and 2020. Our company determined fair value under the income method. Assets under development were revalued where fair value could be reliably measured. The following table summarizes the valuation techniques and significant inputs for our company’s property, plant and equipment assets.
Dec. 31, 2021 |  | Dec. 31, 2020
Valuation Technique |  | Discount Rate |  | Terminal Value Multiple |  | Investment Horizon |  | Valuation Technique |  | Discount Rate |  | Terminal Value Multiple |  | Investment Horizon
Discounted cash flow model |  | 7% |  | 20x |  | 10 yrs |  | Discounted cash flow model |  | 7% |  | 23x |  | 10 yrs
An increase in the discount rate would lead to a decrease in the fair value of property, plant and equipment. Conversely, an increase to the terminal value multiple would increase the fair value of property, plant and equipment. Our company has classified all property, plant and equipment under level 3 of the fair value hierarchy. At December 31, 2021, our company carried out an assessment of the fair value of its property, plant and equipment, resulting in a gain from revaluation of $134 million (2020: $215 million) which was recognized in revaluation surplus in the Consolidated Statements of Comprehensive Income. Our valuation of property, plant and equipment is underpinned by regulated cash flow. Our local revenues have been predominantly unimpacted to date by the recent changes in the macroeconomic environment as we earn a regulated return on an asset base for making the infrastructure available to users with minimal volume and price risk. Key drivers behind the revaluation gain recorded include growth in underlying cash flows at our U.K. regulated distribution business associated with new connections added during the year. Had the assets been carried under the cost model, the carrying amount of property, plant and equipment would have been $3,464 million as at December 31, 2021 (2020: $3,688 million).

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