Consolidated Financial Statements >
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
170
| 2012 annual report prysmian group
B.6
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated at the cost of
acquisition or production, net of accumulated depreciation
and any impairment. Cost includes expenditure directly
incurred to prepare the assets for use, as well as any costs
for their dismantling and removal which will be incurred as
a consequence of contractual or legal obligations requiring
the asset to be restored to its original condition. Borrowing
costs directly attributable to the acquisition, construction or
production of qualifying assets are capitalised and depreciated
over the useful life of the asset to which they refer.
Costs incurred subsequent to acquiring an asset and the cost of
replacing certain parts of assets recognised in this category are
capitalised only if they increase the future economic benefits of
the asset to which they refer. All other costs are recognised in
profit or loss as incurred. When the replacement cost of certain
parts of an asset is capitalised, the residual value of the parts
replaced is expensed to profit or loss.
Depreciation is charged on a straight-line, monthly basis using
rates that allow assets to be depreciated until the end of their
useful lives. When assets consist of different identifiable
components, whose useful lives differ significantly from each
other, each component is depreciated separately under the
component approach.
The useful indicative lives estimated by the Group for the
various categories of property, plant and equipment are as
follows:
The residual values and useful lives of property, plant and
equipment are reviewed and adjusted, if appropriate, at least
at each financial year-end.
Property, plant and equipment acquired through finance leases,
whereby the risks and rewards of the assets are substantially
transferred to the Group, are accounted for as Group assets at
their fair value or, if lower, at the present value of the minimum
lease payments, including any sum payable to exercise a
purchase option. The corresponding lease liability is recorded
under financial payables. The assets are depreciated using the
method and rates described earlier for “Property, plant and
equipment”, unless the term of the lease is less than the useful
life represented by such rates and ownership of the leased
asset is not reasonably certain to be transferred at the lease’s
natural expiry; in this case the depreciation period will be
represented by the term of the lease. Any capital gains realised
on the disposal of assets which are leased back under finance
leases are recorded under liabilities as deferred income and
released to the income statement over the term of the lease.
Leases where the lessor substantially retains all the risks and
rewards of ownership of the assets are treated as operating
leases. Payments made under operating leases are charged to
the income statement on a straight-line basis over the term of
the lease.
Non-current assets classified as held for sale are measured
at the lower of carrying amount and fair value less costs to
sell from the moment they qualify as held for sale under the
related accounting standard.
Land
Not depreciated
Buildings
25-50 years
Plant
10-15 years
Machinery
10-20 years
Equipment and other assets
3-10 years
