Annual report - HSE

4.5.7.2 Property, plant and equipment
Property, plant and equipment are long-term assets owned by the company and used for
the performance of its registered activities. Property, plant and equipment comprise land,
buildings, production equipment, other equipment and assets in the course of construction.
Property, plant and equipment (hereinafter: “operating fixed assets”) are disclosed at cost
less accumulated depreciation. Cost includes costs that can be directly attributed to the
acquisition of an item of property, plant and equipment. The parts of items of plant and
equipment with different useful lives are accounted for as individual assets. Borrowing
costs that are directly allocated to the purchase, construction or production of a qualifying
asset, i.e. until the capitalisation of an asset, are recognised as a part of cost of such an
asset. The company did not obtain any loans for purchase of fixed assets. Accordingly,
the costs of borrowing are not attributed to the assets in the process of construction or
production.
For later measurement of property, plant and equipment the cost model is used.
The company has no fixed assets, for which it would record the residual value when
purchased.
Depreciation is calculated using the straight-line depreciation method, taking into account
the useful life of individual (integral) part of a fixed asset. Depreciation begins to be
calculated from the cost when an asset is available for use.
Assets in the course of construction or production are not depreciated.
Individual items of property, plant and equipment have the following useful lives:
Property, plant and equipment Amortisation rate (%) Useful life in years
Buildings 2% 50
Production equipment 4% 25
Computer equipment 20-50% 2-5
Furniture 10-25% 4-10
Small tools 25-33.33% 3-4
Cars 20% 5
Other plants and equipment 10-33.33% 3-10
Depreciation methods, useful life and other values of groups of assets are examined at
the end of each financial year and adapted if needed. In case useful life is extended, the
company decreases accrued depreciation costs in the discussed financial year, while in
case the useful life is shortened, it increases them. The adjustment of useful life has to be
calculated in a manner that the asset will be depreciated in the new predicted useful life.
The change in useful life is considered as a change in accounting estimate and it affects
solely the period in which the accounting estimate was changed and every following
period of the remaining useful life.
The costs of replacement a part of fixed asset are attributed to the carrying amount of this
asset in case it is possible that future economic benefits related to a part of this asset will
flow to the company and if costs can be reliably measured. All other costs (e.g. regular
maintenance) are recognised in profit or loss as expenses as soon as they are incurred.
Annual Report HSE 2012
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Gains and losses that occur upon disposal of property, plant and equipment are recognised
as a difference between the net sales value and carrying amount of a disposed asset and
are recognised among other operating revenue or write-downs in value.