Investor Presentaiton

18. Property, plant, and equipment Accounting policy (i) Property, plant and equipment Property, plant and equipment are stated at their historical cost of acqui- sition or construction, less accumulated depreciation. Historical cost also includes finance costs related to the acquisition or construction of quali- fying assets. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with these costs will flow to the Company and they can be measured reliably. The carrying amount of the replaced items or parts is derecognized. All other repairs and maintenance are charged to the statement of income during the financial period in which they are incurred. The cost of major refurbishments is included in the carrying value of the asset when future economic benefits exceed the performance initially expected for the exis- ting asset. Refurbishment expenses are depreciated over the remaining useful life of the related asset. Land is not depreciated. Depreciation of other assets is calculated using the straight-line method to reduce their cost to their residual values over their estimated useful lives. Gains and losses on disposals are determined by comparing the sales amount with the carrying amount and are recognized within Other opera- ting income (expenses), net in the statement of income. (ii) Impairment of non-financial assets Assets that are subject to depreciation and amortization are reviewed for impairment whenever events or changes in economic, operating or tech- nological circumstances may indicate impairment or loss of book value. An impairment loss is recognized when the carrying amount of the asset or cash generating unit (CGU) exceeds its recoverable amount, adjusting the carrying amount to the recoverable amount. The recoverable amount is the greater of an asset's fair value less costs to sell and its value-in-use. For the purpose of impairment assessment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets, except goodwill, which have been impaired, are subsequently reviewed for the analysis of a possible reversal of impairment, at the balance sheet date. The recoverability of the assets that are used in the activities of the Company and its subsidiaries is evaluated whenever events or changes in circumstances indicate that the book value of an asset or group of assets may not be recoverable based on future cash flows. If the carrying amount of these assets exceeds their recoverable value, the net amount is adjusted and their useful life is adjusted to new levels. = An asset's carrying amount is written down immediately to its recoverable amount when the asset's carrying amount is greater than its estimated re- coverable amount, in accordance with the criteria adopted by the Company in order to determine the recoverable amount. 153

View entire presentation