| (j) | Property, plant and equipment |
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. The cost includes the purchase price, borrowing cost incurred during the construction period and any other costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management (e.g. nonrefundable tax, transport and the costs of dismantling and removal and site restoration, if applicable). The cost of a self-constructed asset is determined using the same principles as for an acquired asset. The depreciation methods, residual value, as well as the useful lives are reassessed and adjusted if appropriate, annually.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets.
Land is
not
depreciated since it is deemed to have an indefinite life.
Property, plant and equipment, and depreciation include the effects of the predecessor basis of accounting, according the Note
1
-
Corporate information
.
The Company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing a component of such an item if it is probable that the future economic benefits embodied with the item will flow to the Company and the cost of the item can be measured reliably. All other costs are expensed as incurred.
The depreciable amount is the cost of an asset less its residual value. Residual values, if
not
insignificant, are reassessed annually. Depreciation is calculated from the date the asset is available for use, using the straight-line method over the estimated useful lives of the assets.
The estimated useful lives of major property, plant and equipment classes as follows:
| Buildings (years) | | | |
| Plant and equipment (years) | | | |
| Fixtures (years) | | | |
| Fittings (years) | | | |
| External use assets (years) | 2 | | 5 |
The assets residual values and useful lives are reviewed at least annually. Management uses judgment to assess and ascertain the useful lives of these assets.
Gains and losses on sales are determined by comparing the results with the carrying amount and are recognized in Other operating income/(expenses) in the income statement.
