Page 27 - Annual Report KELAG Group 2018
P. 27

PROPERTY, PLANT AND EQUIPMENT
                                         Office and factory buildings                                   33-50
                                         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.

                                      As the accounting treatment by the lessee is amended by the introduction of IFRS 16, lessees will
                                      account for leases by recognising a right-of-use asset and a lease liability from the next financial
                                      year. Details about the effects from the transition to IFRS 16 in the KELAG Group can be found in
                                      the section on not yet applicable IFRSs/IFRICs.


                                      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. 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.
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