ANNUAL INTEGRATED REPORT 2021
128
ANNUAL INTEGRATED REPORT 2021 | AXTEL
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 the
item will flow to the Company and the cost of the item can be
reliably measured. The carrying amount of the replaced part is
derecognized. Repairs and maintenance are recognized in the
consolidated statement of income during the year they are incurred.
Major improvements are depreciated over the remaining useful life
of the related asset.
When the Company carries out major repairs or maintenance of its
property, plant and equipment assets, and the cost is recognized in
the carrying amount of the corresponding asset as a replacement,
provided that the recognition criteria are met. The remaining
portion of any major repair or maintenance is derecognized. The
Company subsequently depreciates the recognized cost in the
useful life assigned to it, based on its best estimate of useful life.
Depreciation is calculated using the straight-line method,
considering separately each of the asset's components, except for
land, which is not subject to depreciation. The estimated useful
lives of the assets classes indicated below:
Vehicles
Buildings
Computers
Office equipment
Telecommunications network
Years
40-60
3-5
4
10
6 a 28
Spare parts to be used after one year and attributable to specific
machinery are classified as property, plant and equipment in other
fixed assets.
Borrowing costs related to financing of property, plant and
equipment whose acquisition or construction relates to qualifying
assets, that require a substantial period of time to be ready for
their use or sale, are capitalized as part of the cost of acquiring
such qualifying assets, up to the moment when they are suitable
for their intended use or sale.
Assets classified as property, plant and equipment are subject
to impairment tests whenever events or circumstances occur
indicating that the carrying amount of the assets may not be
recoverable. An impairment loss is recognized for the amount by
which the carrying amount of the asset exceeds its recoverable
amount in the consolidated statement of income in other expenses,
net. The recoverable amount is the higher of its fair value less costs
to sell and its value in use.
Residual value, useful lives and depreciation method of assets
are reviewed at least at the end of each reporting period and, if
expectations differ from previous estimates, the changes are
accounted for as a change in accounting estimate.
Gains and losses on disposal of assets are determined by comparing
the sale value with the carrying amount and are recognized in other
expenses, net, in the consolidated statement of income.
I. Leases
The Company as lessee
The Company evaluates whether a contract is or contains a
lease agreement at inception of a contract. A lease is defined
as an agreement or part of an agreement that conveys the right
to control the use of an identified asset for a period of time inView entire presentation