12. Property, plant and equipment

Accounting policy

Property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses. The cost of self-produced assets includes the cost of materials, direct labour costs, a reasonable portion of the indirect production costs and capitalised borrowing costs. Where relevant, the estimated costs of dismantling and removing the asset and the costs of restoring the site where the asset was located are added to the total cost.

Computer software that is an integral part of the computer equipment is capitalised as part of the equipment in question. Only assets for which the Group holds the beneficial ownership are recognised on the balance sheet.

Gains and losses on the sale of an item of property, plant and equipment are determined by comparing the sales proceeds with the carrying amount of the item of property, plant and equipment and are recognised net under income in the income statement.

Components

If property, plant and equipment consist of components with different useful lives, these components are accounted for as separate items under property, plant and equipment.

The carrying amount of an item of property, plant and equipment is adjusted for the cost of replacing all or part of that asset when such costs are incurred and if it is likely that the replacement will result in future economic benefits. All other costs of maintaining the assets are recognised as an expense in the income statement as incurred.

Depreciation

Depreciation of property, plant and equipment is applied on a straight-line basis, less residual value and on the basis of the estimated useful life of each individual item of property, plant and equipment. Depreciation is charged to the income statement.

Land is not depreciated, with the exception of street paving. The estimated useful life for different types of property, plant and equipment is as follows:

The specified useful life is an average for the assets concerned and for any components of which those assets consist. The depreciation method, remaining useful life and residual value are reviewed each year.

If an item of property, plant and equipment is designated as investment property due to a change in use, or if an item of property, plant and equipment is designated for own use, transfers are made to investment property or property, plant and equipment respectively. Since the measurement of both categories of non-current assets is the same, the transfer is made at the carrying amount.