Property, plant and equipment are valued at cost of acquisition or production, less scheduled depreciation (Glossary) and impairment losses. They were not revalued in accordance with the option under IAS 16.
Items of property, plant and equipment are written down if there are indications of impairment (see “Impairment”) and the recoverable amount is less than amortized costs. The write-downs are reversed if the reasons for the impairment losses no longer apply, to the maximum of amortized costs.
The cost of acquisition comprises the acquisition price, ancillary costs and subsequent acquisition costs, less any reduction received on the acquisition price. Production costs include direct costs as well as proportionate indirect costs.
Business and factory premises are amortized over a maximum of 50 years, plant and machinery over an average of ten years, other fixed assets and office equipment mainly over five years and products leased to customers as per the terms of the relevant contract. Property, plant and equipment are mainly depreciated using the straight-line method, in accordance with economic utilization. Plant and machinery and other fixed assets and office equipment used in the production process are written down using front-loaded depreciation rates as a result of multi-shift operations. If parts of single assets have different useful lives, they are separately depreciated on a scheduled basis.
The depreciation of the fiscal year as well as impairment losses are included in the Group income statement under the various functional cost headings (cost of sales, research and development expenses, selling, general and administration expenses).
