Page 24 - KELAG Annual Report 2017

PROPERTY, PLANT AND EQUIPMENT
Office and factory buildings 33-55
Plant and machinery 10-60
Other property, plant and equipment 2-10
Wind turbines 20-25

The gain or loss on disposal or decommissioning of an item of property, plant and equipment is
determined as the difference between the net disposal proceeds and the carrying amount of the
asset, and is recognised through profit or loss.

If entities in the Group assume all significant risks and rewards from a leased asset, the asset is
recognised, upon inception, as a finance lease, measured at the present value of the minimum
lease payments (or the lower net realisable value, as the case may be) and presented in non-
current assets, while a lease liability for the same amount is recognised.

The existing leases in which group entities appear as lessees are not material.

If there is any indication of impairment of non-financial assets that fall within the scope of IAS 36,
the carrying amounts are tested for impairment (impairment test). Regardless of whether or not
there is an indication of impairment, an annual impairment test must be carried out for goodwill,
intangible assets with indefinite useful lives and intangible assets that are not yet available for use.
The KELAG Group performed its annual impairment test in the fourth quarter of the year.

An impairment loss is recognised if the carrying amount exceeds the recoverable amount of the
asset or a cash-generating unit (CGU). The recoverable amount is the higher of an asset’s value in
use or fair value less costs to sell. Fair value less costs to sell is primarily calculated with reference
to market prices in line with the IFRS 13 measurement hierarchy, for instance on existing binding
purchase offers that rely on secondary pricing on active markets or recent benchmark
transactions within the sector. In the event that the market-based approach cannot be applied,
the Group uses the income-based approach in the form of the discounted cash flow method (DCF
method). The discount rate is a post-tax rate that reflects the current market assessment and the
specific risks relating to the asset (or cash-generating unit). The relevant pre-tax rate is calculated
iteratively.