12. Property, plant and equipment
| Land and buildings $m |
Fixtures, fittings and equipment $m |
Total $m |
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Cost |
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At 1 January 2016 |
377 | 576 | 953 | |||||||||
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Additions |
2 | 27 | 29 | |||||||||
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Capitalised interest |
1 | — | 1 | |||||||||
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Fully depreciated assets written off |
— | (162 | ) | (162 | ) | |||||||
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Disposals |
— | (3 | ) | (3 | ) | |||||||
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Exchange and other adjustments |
(2 | ) | (9 | ) | (11 | ) | ||||||
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At 31 December 2016 |
378 | 429 | 807 | |||||||||
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Additions |
9 | 35 | 44 | |||||||||
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Fully depreciated assets written off |
— | (19 | ) | (19 | ) | |||||||
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Disposals |
— | (4 | ) | (4 | ) | |||||||
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Exchange and other adjustments |
1 | 8 | 9 | |||||||||
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At 31 December 2017 |
388 | 449 | 837 | |||||||||
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Depreciation and impairment |
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At 1 January 2016 |
(74 | ) | (451 | ) | (525 | ) | ||||||
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Provided |
(5 | ) | (25 | ) | (30 | ) | ||||||
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System Fund expense |
— | (5 | ) | (5 | ) | |||||||
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Fully depreciated assets written off |
— | 162 | 162 | |||||||||
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Disposals |
— | 2 | 2 | |||||||||
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Exchange and other adjustments |
1 | 7 | 8 | |||||||||
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At 31 December 2016 |
(78 | ) | (310 | ) | (388 | ) | ||||||
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Provided |
(7 | ) | (28 | ) | (35 | ) | ||||||
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System Fund expense |
— | (6 | ) | (6 | ) | |||||||
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Fully depreciated assets written off |
— | 19 | 19 | |||||||||
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Disposals |
— | 3 | 3 | |||||||||
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Exchange and other adjustments |
(1 | ) | (4 | ) | (5 | ) | ||||||
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At 31 December 2017 |
(86 | ) | (326 | ) | (412 | ) | ||||||
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Net book value |
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At 31 December 2017 |
302 | 123 | 425 | |||||||||
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At 31 December 2016 |
300 | 119 | 419 | |||||||||
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At 1 January 2016 |
303 | 125 | 428 | |||||||||
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The Group’s property, plant and equipment mainly comprises hotels, but also offices and computer hardware, throughout the world. 43% (2016: 44%) of the net book value relates to the largest owned and leased hotel, of a total of eight open hotels (2016: eight open hotels). At 31 December 2017 and 31 December 2016, there were no hotels under construction.
The carrying value of property, plant and equipment held under finance leases at 31 December 2017 was $181m (2016: $182m).
26% (2016: 25%) of hotel properties by net book value were directly owned, with 57% (2016: 58%) held under leases having a term of 50 years or longer.
Due to localised adverse market conditions, an impairment charge of $27m was recognised during 2015 relating to two hotels in North America following a re-assessment of their recoverable amounts to $37m, based on value in use calculations. Estimated future cash flows were discounted at a pre-tax rate of 11.75%. All impairment charges are included within ‘impairment charges’ on the face of the Group income statement.
The table below analyses the net book value of the Group’s property, plant and equipment by operating segment at 31 December 2017:
| Americas $m |
Europe $m |
AMEA $m |
Greater China $m |
Central $m |
Total $m |
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Land and buildings |
289 | — | — | — | 13 | 302 | ||||||||||||||||||
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Fixtures, fittings and equipment |
43 | 1 | 10 | — | 69 | 123 | ||||||||||||||||||
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| 332 | 1 | 10 | — | 82 | 425 | |||||||||||||||||||
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