Management Report 2020
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Management Report 2020
When parts of an asset item have different useful lives, they are recorded as indi-
vidual asset items (main components). Gains or losses on the disposal of an item
of property, plant and equipment (calculated as the difference between the pro-
ceeds from disposal and the book value of the asset), are recognized in other op-
erating income (expenses) in profit or loss.
Subsequent costs | Subsequent expenses are capitalized to the extent that it is
probable that future benefits associated with the expenses will be received by the
Group. Recurring maintenance and repair expenses are recorded in the result.
Depreciation | Property, plant and equipment items are depreciated using the
straight-line method in income for the year based on the estimated economic use-
ful life of each component. Leased assets are depreciated over the shorter of the
estimated useful life of the asset and the term of the lease unless it is certain that
the Group will obtain ownership of the asset at the end of the lease. Land and land
plots are not depreciated.
Fixed asset items are depreciated from the date they are installed and are availa-
ble for use, or in the case of assets built in-house, from the day construction is
completed and the asset is available for use.
The estimated useful lives for the current year are as follows:
Description
Rate
Soil correction and development
10%
Buildings and improvements
3.33%
Furniture and fixtures
10%
Office equipment and facilities
16.67%
Agricultural equipment and industrial facilities
9.09%
Vehicles
Other
8.33%
10%
Average lifetime
10 years
30 years
10 years
6 years
11 years
12 years
10 years
An item of property, plant and equipment is written off when sold or when no
future economic benefit is expected from its use or sale. Any gain or loss re-
sulting from the write-off of the asset (calculated as the difference between
the net sale value and the book value of the asset) is included in the income
statement in the year the asset is written off.
SLC
Agrícola
In the year ended December 31, 2020, the Company found that its fixed assets
were not above recoverable value, and consequently no provision for impair-
ment of fixed assets was required.
The Company calculates for certain asset classes the residual value consider-
ing the revenue it would obtain from the sale less estimated selling expenses
if the asset had the expected age and condition at the end of its useful life.
Assets' residual values and useful lives and depreciation methods are reviewed
at year end, and are adjusted on a prospective basis, if applicable.
f) Reduction to recoverable value
Financial assets (including receivables) | A financial asset not measured at fair
value through profit or loss is evaluated at each reporting date to determine
whether there is objective evidence that an impairment loss has occurred. An
asset has a loss in its recoverable amount if objective evidence indicates that
a loss event occurred after the initial recognition of the asset, and that loss
event had a negative effect on projected future cash flows that can be reliably
estimated.
The objective evidence that financial assets have lost value may include non-
payment or delayed payment by the debtor, restructuring of the amount due
to the Group under conditions that the Group would not consider in other
transactions, indications that the debtor or issuer will go bankrupt, or the dis-
appearance of an active market for a security. In addition, for an equity instru-
ment, a significant or prolonged decline in its fair value below its cost is ob-
jective evidence of impairment.
Financial assets measured at amortized cost | The Group considers evidence of
loss of value of assets measured at amortized cost, both at the individualized
and collective levels. Individually significant assets are assessed for loss of spe-
cific value. All individually significant receivables and investment securities held
to maturity that are identified as not having suffered a loss in value are then
collectively valued for any loss in value that has occurred but has not yet been
identified. Individually important assets are collectively valued for the loss in
value by grouping these securities together with similar risk characteristics.
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