Page 102 - KELAG Annual Report 2019
P. 102

This cost includes, among other things, the cost of replacing part of the property, plant and
                                      equipment and borrowing costs for long-term construction projects (see the explanations on
                                      judgements for more details) if the recognition criteria are met.

                                      When significant parts of property, plant and equipment are required to be replaced at intervals,
                                      the Group recognises depreciation on such parts individually in line with their specific useful lives
                                      (components  approach).  The  same  applies  to  scheduled  major  inspections  (mainly  turbine
                                      inspections) the costs arising in this context are recognised in the carrying amount of the related
                                      item of property, plant and equipment as a replacement if the recognition criteria are satisfied. All
                                      other repair and maintenance costs are recognised through profit or loss as incurred.

                                      An item of property, plant and equipment is derecognised upon  disposal or when no future
                                      economic benefits are expected from its use or disposal.

                                      Depreciation of property, plant and equipment subject to depletion is based on the expected
                                      useful lives. The following useful lives have been used:




                                       PROPERTY, PLANT AND EQUIPMENT
                                       Office and factory buildings                                    33 - 50
                                       Plant and machinery                                             10 - 60
                                       Other property, plant and equipment                              2 - 10



                                      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.

                                      In the financial year 2019, IFRS 16 replaced the former rules on the recognition of leases. The main
                                      change from this was the accounting treatment by the lessee, as lessees account for leases by
                                      recognising a right-of-use asset and a lease liability. Under the former rules on the recognition of
                                      leases – that is IAS 17 in connection with IFRIC 4 – a similar approach applied only to leases that
                                      were classified as finance leases. Further details about the first-time application of IFRS 16 in the
                                      KELAG Group can be found in the section on new 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.
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