Property, plant and equipment |
Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any 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 and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.
Subsequent costs are recognized in the carrying amount of property, plant and equipment at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.
Property, plant and equipment, except for land, are depreciated on a straight-line basis over estimated useful lives that appropriately reflect the pattern in which the asset’s future economic benefits are expected to be consumed. For loaded nuclear fuel related to long-term raw materials and spent nuclear fuels related to asset retirement costs, the Company uses the production method to measure and recognizes as expense the economic benefits of the assets.
The estimated useful lives of the Company’s property, plant and equipment are as follows:
| Useful lives (years) | ||
|
Buildings |
8 ~ 40 | |
|
Structures |
8 ~ 50 | |
|
Machinery |
2 ~ 32 | |
|
Vehicles |
3 ~ 8 | |
|
Loaded heavy water |
30 | |
|
Asset retirement costs |
18, 30, 40, 60 | |
|
Finance lease assets |
6 ~ 32 | |
|
Ships |
9 | |
|
Others |
4 ~ 15 |
A component that is significant compared to the total cost of property, plant and equipment is depreciated over its separate useful life.
Depreciation methods, residual values and useful lives of property, plant and equipment are reviewed at the end of each reporting period and if change is deemed appropriate, it is treated as a change in accounting estimate. As a result of such annual review, useful lives of certain machinery were changed during 2016. Depreciation expenses increased by ￦160,985 million for the year ended December 31, 2016. Depreciation expenses increased by ￦160,985 million and ￦130,514 million for the years ended December 31, 2016 and 2017, respectively. Depreciation expenses are expected to increase by ￦91,197 million for the year ending December 31, 2018, and to decrease by ￦382,696 million for the years after December 31, 2018.
Property, plant and equipment are derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of a property, plant and equipment, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in income or loss when the asset is derecognized.