| G. | Property, plant and equipment |
| (1) | Recognition and measurement |
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
Cost includes expenditures that are directly attributable to acquisition of the asset. The cost of self-constructed assets includes the cost of materials, direct labor and financing costs as well as any other cost directly attributable to bringing the asset to the condition for its use intended by the management, and the estimated costs of dismantling and removing the items and restoring the site on which they are located when the Group has an obligation to vacate and restore the site. The cost of purchased software that is integral to the functionality of the related equipment is recognized as part of the cost of the equipment.
Spare parts, servicing equipment and stand-by equipment are classified as property, plant and equipment when they meet the definition of property, plant and equipment under IAS 16, otherwise they are classified as inventory.
When major parts of the property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of the property, plant and equipment.
Gain or loss from the disposal of an item of property, plant and equipment is determined by comparing the proceeds from disposal of the asset with its carrying amount. Gain or loss from the sale of fixed assets is recognized under operating income in the statement of income.
| (2) | Subsequent expenditure |
The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefit embodied in the replaced item will flow to the Group and its cost can be measured reliably. The costs of day-to-day servicing are recognized in the statement of income as incurred.
| (3) | Depreciation |
Depreciation is recognized in the statement of income on a straight-line basis over the estimated useful life of each part of an item of property, plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets under finance lease agreements are depreciated over the shorter of the lease term and their useful lives.
An asset is depreciated when it is ready for use, meaning when it reaches the location and condition necessary for it to be capable of operating in the manner intended by management.
Leasehold improvements are depreciated over the shorter of the lease term, including the extension option held by the Group and expected to be exercised and the expected life of the improvement.
The estimated useful lives for the current period are as follows:
| Useful life | |||||
| Fixed line and international network equipment | |||||
| (switches, transmission, power) | 4-12 | ||||
| Network | 12-33 | ||||
| Subscriber equipment and installations | 4-8 | ||||
| Equipment and infrastructure for multichannel television | 3-15 | ||||
| Vehicles | 6-7 | ||||
| Office and general equipment | 5-10 | ||||
| Electronic equipment, computers and internal communication systems | 3-7 | ||||
| Cellular network | 4-10 | ||||
| Passive radio equipment at cellular network sites | up to December 31, 2037 | ||||
| Buildings | 25 | ||||
| Seabed cable | 4-25 (mainly 25) | ||||
Depreciation methods, useful lives and residual values are reviewed at least at each reporting year and adjusted as required.