Annual report - HSE

The anticipated costs of regular inspections and repairs of fixed assets are considered as
parts of property, plant and equipment. They include repairs that are usually carried out
every few years (periodically) and require substantial resources.
The cost of an item of property, plant and equipment constructed or manufactured within
the Group consists of the costs incurred as a result of its construction or manufacturing
and of indirect construction or manufacturing costs that can be attributed to the item.
For subsequent measurement of property, plant and equipment the cost model is used.
The Group has no fixed assets for which it would record the residual value when purchased.
Assets acquired free-of-charge are not depreciated, while at the same time a part of longterm
deferred revenue is transferred to other operating revenue. This part equals the value
of calculated depreciation.
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 when
an asset is available for use. Land, quarries and 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 1-10% 10-100
Parts of buildings 2.5-20% 5-40
Production equipment 1.3-20% 5-77
Parts of production equipment 5-33% 3-20
Computer equipment 5-50% 2-20
Furniture 10-25% 4-10
Small tools 12.5-33.33% 3-8
Cars 10-30% 3-10
Other vehicles 4-25% 4-25
Other plants and equipment 4-33.33% 3-25
Useful life of groups of fixed assets are examined at the end of each financial year and
adapted, if needed. In the event their useful life is extended, the cost of depreciation in
the current year is decreased. If useful life is shortened, depreciation cost increases. The
adjustment of useful life has to be calculated in a manner that an 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 of a part of fixed asset are attributed to the carrying amount of
this asset if it is possible that future economic benefits related to a part of this asset will
flow to the company and if cost 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.
Gains and losses that occur in disposal of property, plant and equipment are recognised as
a difference between the net sales value and carrying amount of the disposed asset and
are recognised among other operating revenue or write-downs in value.
5.5.7.4 Assets leased
Lease is classified as finance lease in case significant risks of ownership benefits are
transferred to the lessee with lease conditions.
Annual Report HSE 2012
5 Financial Report of HSE Group
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