| d) | Property, plant and equipment |
i. Recognition and measurement
Property, plant and equipment, except for land, are recorded at acquisition cost less accumulated depreciation and any accumulated impairment losses. Land is measured at the acquisition costs less any accumulated impairment losses.
Acquisition cost includes the purchase price, as well as any cost directly attributable to the acquisition of the asset, including all costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
When components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
An item of property, plant and equipment is derecognized at the time of disposal or when no future economic benefits are expected to arise from the continued use of the asset. Gains or losses on the sale of an item of property, plant and equipment are determined by comparing the proceeds from the sale with the carrying amount of property, plant and equipment, and are recognized net under “other income (expenses)” in profit and loss for the year.
ii. Subsequent costs
The replacement cost of an item of property, plant and equipment is capitalized if the future economic benefits associated with the cost are expected to flow to the Company and the related cost is reliably determined. The carrying amount of the replaced item is written off from the accounting records. Maintenance and repair expenses related to property, plant and equipment are expensed as incurred.
iii. Depreciation
Depreciation is calculated on the cost of the asset less its residual value, using the straight line method, based on the estimated useful life of the assets. Depreciation is recognized in profit and loss beginning from the time when the assets are available for use.
Below are the estimated useful lives for 2017, 2016 and 2015:
| | | Average
useful Life | |
| Buildings | | | 46 | |
| Machinery and Equipment | | | 19 | |
| Vehicles | | | 11 | |
| Computers | | | 8 | |
| Furniture | | | 11 | |
The Company has estimated the following residual values as of December 31, 2017, 2016 and 2015:
| | | Residual Value | |
| Buildings | | | 9 | % |
| Machinery and Equipment | | | 8 | % |
| Vehicles | | | 5 | % |
| Computers | | | 0 | % |
| Furniture | | | 2 | % |
