| 2.2.14 | Property, plant and equipment |
Property, plant and equipment are recognized by the acquisition, formation or construction cost, less accumulated depreciation and impairment losses.
Depreciation is calculated by the straight-line method based on the asset’s estimated useful life (Note 16). Land is not depreciated.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and the cost of the item can be measured reliably.
The Company estimates the residual value for certain aircraft and spare parts included in the Exchange Pool Program. The Company does not attribute residual values to other assets as assets are not usually sold and in the event of a sale, the amount is not significant.
The items comprising property, plant and equipment are summarized below:
| a) | Land - mainly comprises areas on which the industrial, engineering and administrative buildings are located. |
| b) | Buildings and land improvements - mainly plants, engineering departments and offices, and land improvements include parking lots, road systems and water and sewage networks. |
| c) | Facilities - comprise auxiliary industrial facilities that directly or indirectly support the Company’s industrial operations, as well as facilities of the engineering and administrative departments. |
| d) | Machinery and equipment - machinery and other equipment directly or indirectly used in the manufacturing process. |
| e) | Furniture and fixtures - furniture and fixtures used in the production, engineering and administrative departments. |
| f) | Vehicles - mainly industrial vehicles and automobiles. |
| g) | Aircraft - mainly aircraft leased to airlines, and those used by the parent company to assist in testing new projects. |
| h) | Computers and peripherals – information technology equipment used mainly in the production process, engineering and administration. |
| i) | Tooling - tools used in the Company’s production process. |
| j) | Property, plant and equipment in progress - construction works to expand the manufacturing plants and aircraft maintenance centers. |
| k) | Exchange pool program - the exchange Pool program is an operation in which the customer contracts the availability of spare parts for aircraft maintenance. In this program, when it is necessary to change a damaged part , the customer delivers the damaged part to the Company and the Company provides the customer with a part in working order. The damaged part is in turn reconditioned and added to the Pool. |