ANNUAL REPORT 2011 - DONG Energy
ANNUAL REPORT 2011 - DONG Energy
ANNUAL REPORT 2011 - DONG Energy
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DKK million Land and<br />
Impairment testing<br />
<strong>DONG</strong> <strong>Energy</strong> tests property, plant and equipment for impairment<br />
if there is any indication of impairment.<br />
In an impairment test, the asset’s recoverable amount is<br />
compared with its carrying amount. An impairment loss is<br />
recognised whenever the carrying amount of an asset or its<br />
cash-generating unit (CGU) exceeds its recoverable amount.<br />
The recoverable amount of property, plant and equipment<br />
is the higher of the assets’ fair value less expected disposal<br />
costs and the present value of the expected future net cash<br />
fl ows (value in use).<br />
production assets<br />
Oil and gas fi elds<br />
Producing oil and gas fi elds in the Exploration & Production<br />
segment were tested for impairment in <strong>2011</strong>. Based on the<br />
impairment testing of oil and gas-producing fi elds, it was estimated<br />
that the recoverable amount exceeded the carrying<br />
buildings<br />
Production<br />
assets<br />
Exploration<br />
assets<br />
Fixtures and<br />
ttings, tools and<br />
equipment<br />
Property, plant and<br />
equipment under<br />
construction<br />
Cost at 1 January 2010 3,482 74,257 2,997 473 13,043 94,252<br />
Foreign exchange adjustments 2 1,426 49 - 433 1,910<br />
Additions 20 2,840 386 12 13,046 16,304<br />
Disposals (27) (744) (100) (13) (196) (1,080)<br />
Transfers to assets classi ed as held for sale (4) (1,046) - (1) (1) (1,052)<br />
Transfers 6 9,516 (2,357) 11 (7,176) 0<br />
Reclassi cations 28 - - - 12 40<br />
Cost at 31 December 2010 3,507 86,249 975 482 19,161 110,374<br />
Depreciation and impairment losses<br />
at 1 January 2010 (469) (23,430) - (206) (17) (24,122)<br />
Foreign exchange adjustments - (324) - (1) - (325)<br />
Depreciation, disposals 11 171 - 13 - 195<br />
Depreciation charge (141) (5,111) - (84) - (5,336)<br />
Impairment charge (23) (294) - - - (317)<br />
Transfers to assets classi ed as held for sale 2 241 1 - 244<br />
Reclassi cations (28) - - - - (28)<br />
Depreciation and impairment losses<br />
at 31 December 2010 (648) (28,747) 0 (277) (17) (29,689)<br />
Carrying amount at 31 December 2010 2,859 57,502 975 205 19,144 80,685<br />
Total<br />
amount, and no impairment losses were therefore recognised on<br />
the Group’s producing oil and gas fi elds in <strong>2011</strong>.<br />
The main criteria used for determining the recoverable amount<br />
are the expectations concerning reserves, oil and gas prices,<br />
exchange rates and discount rates.<br />
Electricity distribution network<br />
The electricity distribution network was tested for impairment<br />
in <strong>2011</strong>. The electricity distribution network is recognised in the<br />
Sales & Distribution segment.<br />
Based on the impairment testing of the electricity distribution<br />
network, it is estimated that the recoverable amount exceeds<br />
the carrying amount. No impairment loss was consequently recognised<br />
on the Group’s electricity distribution network in <strong>2011</strong>.<br />
The main criteria in connection with the determination of the<br />
recoverable amount are the regulatorily permitted return, discount<br />
rates, expected volume of transported kWh, operation and<br />
maintenance as well as the associated investment level.<br />
<strong>DONG</strong> ENERGY <strong>DONG</strong> ENERGY GROUP <strong>ANNUAL</strong> <strong>REPORT</strong> <strong>2011</strong> – COnsOliDatED finanCial statEmEnts<br />
89 93<br />
notes