| E. |
Property, plant and equipment, net
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(1) |
Recognition and measurement
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Items of property, plant and equipment comprise mainly power station structures, power distribution facilities and related offices. These items are measured at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
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The cost of materials and direct labor;
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Any other costs directly attributable to bringing the assets to a working condition for their intended use;
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When the Group has an obligation to remove the assets or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and
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Capitalized borrowing costs.
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If significant parts of an item of property, plant and equipment items have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss in the year the asset is derecognized.
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group, and its cost can be measured reliably.
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognized in profit or loss. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
The following useful lives shown on an average basis are applied across the Group:
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Years
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Roads, buildings and leasehold improvements
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2 – 50
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Installations, machinery and equipment:
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Thermal power plants
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10 – 35
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Hydro-electric plants
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70 – 90
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Wind power plants
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25
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Power generation and electrical
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20
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Dams
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18 – 80
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Office furniture, motor vehicles and other equipment
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3 – 16
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Substations, medium voltage equipment and transf.MV/LV
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30 – 40
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Meters and connections
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10 – 25
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Depreciation methods, useful lives and residual values are reviewed by management of the Group at each reporting date and adjusted if appropriate.
