DSV Annual Report 2022
61
DSV Annual Report 2022 Consolidated financial statements 2022
= III
3.3 Property, plant and
equipment - continued
Depreciation is carried out on a straight-line basis over the expected useful
lives of the assets. The expected useful lives of the overall asset categories
are as follows:
'
Terminals and administration buildings:
50-60 years
Other buildings and building elements:
Technical plant and machinery:
Other plant and operating equipment:
Land is not depreciated
10-30 years
6-10 years
3-8 years
The basis of depreciation takes into account the residual value of assets and
is reduced by any impairment losses. The residual value is calculated on the
date of acquisition and reassessed once a year. Depreciation will be halted if
the residual value exceeds the carrying amount of the asset.
Assets are transferred to assets held for sale if it is highly probable that
their carrying amount will be recovered primarily through sale rather than
through continuing use.
Management judgements and estimates
Judgement is applied in determining the depreciation period and future
residual value of the assets recognised and is generally based on historical
experience. Reassessment is done annually to ascertain that the deprecia-
tion basis applied is still representative and reflects the expected life and
future residual value of the assets.
3.4 Contract assets and accrued
cost of services
Accounting policies
Contract assets and accrued costs of services include accrued revenue and
accrued costs from freight forwarding services, contract logistics and other
related services in progress at 31 December 2022.
Contract assets are recognised when a sales transaction fulfils the criteria
for revenue recognition, but the final invoice has yet to be issued to the
customer for the services delivered. Refer to note 4.4 for disclosure of
credit risk as trade receivables carry substantially the same characteristics
as contract assets.
Accrued costs of services are estimated and recognised when supplier in-
voices relating to recognised revenue for the reporting period have yet to
be received.
Management judgements and estimates
In the preparation of the consolidated financial statements, significant
estimates are applied in assessing services in progress, including accrual of
income and pertaining direct costs. These estimates are based on experi-
ence and continuous follow-up on services in progress relative to sub-
sequent invoicing.
3.5 Inventories
Accounting policies
Inventories are measured at the lower of cost and net realisable value. The
cost of inventories comprises all costs of purchase, processing and other
costs incurred in bringing the inventories to their present condition. Write-
downs of inventories to net realisable value are recognised as direct costs in
the income statement.
Inventories (DKKm)
Stocks
2022
2021
93
119
Property projects under construction
Total
1,796
1,889
165
284
Inventories consists of land and buildings under construction held for the
purpose of sale in the ordinary course of business (property projects) and
stocks. In total, DKK 1,231 million relating to property projects was recog-
nised as an expense in 2022 (2021: DKK 1,562 million).
3.6 Leases
Accounting policies
Whether a contract contains a lease is assessed at contract inception. For
identified leases, a right-of-use asset (ROU) and corresponding lease
liability are recognised on the lease commencement date.
Upon initial recognition, the right-of-use asset is measured at cost corre-
sponding to the lease liability recognised, adjusted for any lease prepayments
or directly related costs, including dismantling and restoration costs. The lease
liability is measured at the present value of lease payments of the leasing
period discounted using the interest rate implicit in the lease contract. In cas-
es where the implicit interest rate cannot be determined, an appropriate in-
cremental DSV borrowing rate is used. In determining the lease period exten-
sion, options are only included if it is reasonably certain they will be utilised.
At subsequent measurement, the right-of-use asset is measured less accu-
mulated depreciation and impairment losses and adjusted for any remeas-
urements of the lease liability. Depreciation is carried out following the
straight-line method over the lease term or the useful life of the right-of-
use asset, whichever is shortest.View entire presentation