NOTE 5. PROPERTY, PLANT AND EQUIPMENT

	2017			2016
Cost	$	6,733,634		$	7,011,178
Accumulated depreciation		(3,559,810	)		(3,369,289	)
	$	3,173,824		$	3,641,889
Rig equipment		2,823,782			3,210,933
Rental equipment		60,179			79,398
Other equipment		66,560			85,731
Vehicles		16,280			22,030
Buildings		71,102			82,335
Assets under construction		102,035			126,430
Land		33,886			35,032
	$	3,173,824		$	3,641,889

Cost

	Rig Equipment			Rental Equipment			Other Equipment			Vehicles			Buildings			Assets Under Construction			Land			Total
Balance, December 31, 2015	$	6,069,179		$	171,220		$	240,192		$	43,552		$	131,164		$	258,952		$	35,587		$	6,949,846
Additions		88,277			92			1,092			166			913			112,932			—			203,472
Additions through business acquisition		28,125			—			—			—			—			—			—			28,125
Re-measurement to fair value before disposal		7,605			—			—			—			—			—			—			7,605
Disposals		(50,384	)		(11,389	)		(4,988	)		(440	)		—			—			—			(67,201	)
Reclassifications		229,012			—			12,874			2,573			702			(245,161	)		—			—
Effect of foreign currency exchange differences		(104,823	)		(779	)		(2,097	)		(704	)		(1,418	)		(293	)		(555	)		(110,669	)
Balance, December 31, 2016		6,266,991			159,144			247,073			45,147			131,361			126,430			35,032			7,011,178
Additions		21,268			71			49			42			235			53,158			—			74,823
Disposals		(71,014	)		(9,758	)		(785	)		(339	)		(930	)		—			—			(82,826	)
Reclassifications		67,779			84			216			113			—			(68,566	)		—			(374	)
Effect of foreign currency exchange differences		(250,858	)		(1,530	)		(1,603	)		(1,762	)		(3,281	)		(8,987	)		(1,146	)		(269,167	)
Balance, December 31, 2017	$	6,034,166		$	148,011		$	244,950		$	43,201		$	127,385		$	102,035		$	33,886		$	6,733,634

Accumulated Depreciation

	Rig Equipment			Rental Equipment			Other Equipment			Vehicles			Buildings			Assets Under Construction		Land		Total
Balance, December 31, 2015	$	2,789,991		$	74,220		$	142,846		$	18,712		$	40,745		$	—	$	—	$	3,066,514
Depreciation expense		342,224			16,039			22,504			5,060			8,591			—		—		394,418
Disposals		(32,427	)		(10,246	)		(3,241	)		(417	)		—			—		—		(46,331	)
Effect of foreign currency exchange differences		(43,730	)		(267	)		(767	)		(238	)		(310	)		—		—		(45,312	)
Balance, December 31, 2016		3,056,058			79,746			161,342			23,117			49,026			—		—		3,369,289
Depreciation expense		334,896			15,159			19,914			5,064			8,488			—		—		383,521
Disposals		(67,304	)		(6,331	)		(592	)		(320	)		(208	)		—		—		(74,755	)
Impairment		15,313			—			—			—			—			—		—		15,313
Effect of foreign currency exchange differences		(128,579	)		(742	)		(2,274	)		(940	)		(1,023	)		—		—		(133,558	)
Balance, December 31, 2017	$	3,210,384		$	87,832		$	178,390		$	26,921		$	56,283		$	—	$	—	$	3,559,810

Impairment Test

Precision reviews the carrying value of its long-lived assets at each reporting period for indicators of impairment. As at December 31, 2017 the Corporation determined that the uncertainty around future activity levels within Mexico was an indicator of impairment and performed a comprehensive assessment of the carrying values of property, plant and equipment of the Mexico drilling CGU within the Contract Drilling Services segment.

The recoverable amount was determined using a value in use calculation. Projected cash flows covered a five-year period and were based on future expected outcomes taking into account existing term contracts, past experience and management’s expectation of future market conditions. The primary source of cash flow information was the strategic plan approved by executives of the Corporation. The strategic plan was developed based on benchmark commodity prices and industry supply-demand fundamentals.

Cash flows used in the calculation were discounted using a discount rate specific to the Mexico drilling CGU. The discount rate derived from Precision’s weighted average cost of capital, adjusted for risk factors specific to the CGU and used in determining the recoverable amount for the Mexico drilling CGU was 17.1% (2016 – 15.1%). The test resulted in an impairment charge of $15.3 million as the carrying value of the CGU’s assets exceeded its value in use of $26.3 million.